GlobalData: Supply Chain Aiding Recovery of M&A Activity

Global M&A activity is officially on the rebound. 

Of course, it would be somewhat concerning if mergers and acquisitions failed to mount some sort of comeback in 2024. Last year was truly dismal for the market, which dropped 15% to US$3.2tn – its lowest level in a decade, according to Bain & Co. 

However, despite the impact of high interest rates and low growth persisting across all major economies, the total deal value of M&A increased by 38% in the first quarter of 2024 compared to the same quarter in 2023. 

And interestingly, the supply chain has emerged as a prominent theme in helping the recovery of global M&A activity.

Supply chain-related deals total US$52bn

Well placed to assess the state of the M&A market is GlobalData, a data and analytics specialist which has a proven track record in helping thousands of the world’s largest companies – including more than 70% of the FTSE 100 and 60% of the Fortune 100 – make more timely and better business decisions.

This is achieved thanks to its unique data, expert analysis and innovative solutions – all provided in one platform. 

In its latest report, GlobalData provides a thorough overview of the M&A activity which took place around the world, across all sectors, in Q1 2024. 

It reveals supply chain-related deals totalled US$52bn across 19 deals, making it the largest theme among the top 150 deals.

“An increase in geopolitical tensions, population growth, ESG considerations, rising e-commerce activities, labour shortages and digital transformation have all contributed to a greater focus on supply chain-related deals,” explains Priya Toppo, Thematic Intelligence Analyst at GlobalData 

“This was especially true in the consumer, basic materials, transportation, infrastructure, and logistics and industrial sectors.”

M&A outlook ‘cautiously optimistic’

The biggest supply chain deal in Q1 2024 was Novo Holdings’ acquisition of Catalent for US$17bn, which also happened to be the biggest in the healthcare sector. 

This was followed by Novo Nordisk’s purchase of three fill-finish sites from Novo Holdings for US$11bn and Japan Investment Corporation’s deal to buy a 66.7% stake in JSR for US$6bn.

An ongoing trend was the dominance of North America in M&A deal activity, accounting for 3,007 deals worth US$385bn. On the flip side, both South America and the Middle East and Africa saw a decline in deal value both on a year-on-year and quarter-on-quarter basis.

“The M&A outlook for the rest of 2024 remains cautiously optimistic,” adds Priya. “The prospect of rate cuts in certain markets and a generally improving global growth outlook could see an increase in activity throughout the year.

“Mega deals will continue to face hurdles, especially in the US, where antitrust concerns have been a focus of regulators.”

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