Executive Summary
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.
Part one:
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.
Part two:
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.
Part three:
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.