L’Oreal announced that it had signed a deal to purchase the beauty company Aesop. Hewlett Packard Enterprise acquired Israeli cloud security company Axis for $500 million. In addition, U.S. midstream company Energy Transfer merged with Lotus Midstream Operations for $1.45 billion. Commentators predict these and other deals will increase M&A activity in the second half of 2023.
However, the underlying conditions are slowing the process of making deals. Inversion of the yield curve in which short-term debt instruments are more profitable than bonds issued over a longer period is unsustainable. The rising rates of interest make it difficult to borrow money, and shift the focus of many businesses away from M&A. Global volatility continues to discourage would-be buyers.
A growing attention to ESG issues (environmental Social and Governance) is a different force that will influence the future of M&A. As these issues become part of the strategic agendas of more http://thisdataroom.com/how-virtual-data-room-vdr-benefit-ma-deals/ CEOs, they will likely drive M&A including the purchase and sale of assets to decrease their ecological footprint.
The M&A landscape continues to change as companies search for partners who are closer to the core goals of their businesses. M&A will continue to grow in industries with disruptions to supply chains which are increasing, and where vertical integration is needed more than ever. This will include the information and communication technology (ICT) as well as manufacturing, automotive and food industries. In addition consolidation is likely to continue in areas where startup success has led to high valuations. This includes sectors like artificial intelligence, augmented reality, blockchain and telemedicine.
