In a dance recital, the most mesmerizing performances are those where two partners move together in a single dance, with their individual spinning and twirling into a single seamless unit. This is the case of companies that combine or acquire with an eye towards expansion beyond borders. This may come in the form of a rise in financial power through an alliance, or access to new markets via an insignificant Dutch company acquisition. Global mergers and acquisitions when executed correctly can transform businesses and create global success.
With the business world experiencing dramatic shifts, CEOs across industries acknowledge that Acquisition cost formula organic growth on its own is no longer sufficient. In an environment which the speed of change is ever-increasing, M&A can be an effective way to scale quickly and reach new customers.
While the global M&A activity hit an all-time low in 2023, the industry is set to increase in 2024. With global inflation hovering at elevated levels and central banks having stricter borrowing guidelines, interest rates are higher than they were in recent years, which could raise the cost of financing M&A transactions.
M&A transactions are usually impacted by regulatory hurdles. These can add a layer of complexity to the process and slow it down. M&A deals are also a collaborative and asynchronous process, requiring a lot of communication between teams. Making it to the mark is time-consuming and difficult, especially when dealing with international issues.