Putting the pieces into place: The next drivers of strategic M&A by Eversheds Sutherland tells the story of the future drivers of competitive advantage and how M&A can unlock value.
Business leaders are facing uncertain times. At the start of 2022, seven in ten business leaders believed that their organization’s appetite for M&A activity would increase significantly over the next 12 months. However, in April 2022, 90% of business leaders said that the ongoing war in Ukraine and its associated effects are causing deals to be stopped or postponed to some extent – with one in five (21%) claiming that their organization is postponing all M&A activity. However, organizations continue to face the same urgent strategic gaps – in skills, technology and logistics – that need to be bridged in order to grow. Despite this turbulent landscape, business leaders still recognize that M&A offers a fast-track solution to unlocking strategic value.
Future drivers of business success: Talent, tech and trade – the new M&A triarchy
The research reveals that M&A is increasingly being driven by the need to satisfy strategic demand for talent, tech and trade capabilities in order for organizations to evolve. Together, talent, tech and trade form a new M&A triarchy.
More than 70% of business leaders view talent, tech & trade as the key levers of growth, core to their current and future business strategy.
What dealmakers value
When suitable acquisition targets seem limited but liquidity is high, what makes one target more desirable – and therefore more valuable – than another? Acquirers view brand and reputation as creating the most added value.
77% of business leaders identify ‘brand and reputation’ as an attribute they value in an acquisition target, making it the number one driver of value in our study.
Strong M&A headwinds in 2022
Despite high levels of economic confidence and an enthusiasm for dealmaking, the landscape is also fraught with challenges. Barriers to M&A deals over the next 12 months include rising inflation, protectionist trade policies and the war in Ukraine.
Two-thirds (66%) of business leaders believe the rise of protectionism is creating an unstable environment for M&A.