Alex Zachary: What does the M&A landscape look like for the rest of 2024?

With increasing pressures to maintain a competitive advantage, there is a growing recognition of the transformative impact M&A can have, compared with the slower burn of organic growth.

The year’s M&A activity seems likely to continue being driven by the ongoing need for larger businesses to adapt to rapidly changing industries, embrace new technologies (such as AI) to keep up with (or ahead of) the competition, scale up to achieve economies and give security and greater scope for taking opportunities, expand into international markets and enhance their ESG credentials.

A good example of this trend was the acquisition of Andigestion by Seven Trent Green Power from our client Summerleaze, which recently won Deal of the Year at the Thames Valley Deals Awards.

As larger companies are not impervious to the economic instability of late, there is an M&A strategy trend around focusing on making multiple smaller acquisitions, rather than larger, more expensive takeovers. On the other side, smaller business owners may be experiencing a static market with slow organic growth and contemplating selling due to fatigue from tough conditions.

This appetite for M&A is good news for the UK market, which was recently ranked as the most attractive destination in Europe for domestic and inbound M&A activity. Deals are further encouraged by lower inflation and rates normalising. Private equity firms also continue to harbour substantial funds and are showing keen interest in businesses that have managed effectively to weather the recent market turmoil.

Although the upturn is expected to be more measured than in previous years, the rest of 2024 is looking positive with M&A activity likely to be influenced by ESG factors, cross-border activity and technological innovation.

Alex Zachary is a Corporate & Commercial Partner at B P Collins LLP