2023 Headwinds in M&A and Outlook for 2024

In this episode of S&C’s Critical Insights, Senior M&A Partner Frank Aquila and Global Head of M&A Melissa Sawyer discuss major takeaways from M&A in 2023 and potential developments for 2024.

While we avoided a recession in 2023, ongoing economic uncertainty, rising interest rates, regulatory headwinds and geopolitical tensions contributed to a second year of falling activity levels in global M&A following 2021’s record-breaking year.

M&A deals continued to face scrutiny from antitrust and foreign investment regulators in the United States and globally. In 2023, the EU adopted its new Foreign Subsidies Regulation, and in the United States, the FTC and DOJ proposed changes to the HSR rules and issued Draft Merger Guidelines.

Cross-border M&A activity remained significant at $707 billion during the first nine months of 2023, but was down 21 percent compared to a year ago. Geopolitics, sanctions and foreign investment and competition regulation explain some of the trends in cross-border M&A, as investment pivots to align with countries’ political affiliations.

Frank and Melissa expect to see more blends of traditional acquisition financing mixed with private credit solutions in 2024. They anticipate a significant uptick in activity this year with an increase in strategic buyers executing on deals, private equity buyers and a rebound in the cross-border deals.