Global M&A deal value drops 15% to $3.2 trillion

07 March 2024 2 min. read
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The global M&A market saw total deal value drop by 15% last year to $3.2 trillion, as both buyers and sellers waited for the other to make the first move in a more tensed market.

Following a record breaking 2021, global deal value fell for a second consecutive year in 2023 to hit $3.2 trillion, the lowest level in a decade, said Bain & Company in its latest annual report.

The decline in deal value was the result of a number of factors, with the valuation gap between buyers and sellers the biggest obstacle to dealmaking. Other headwinds included high interest rates, macroeconomic uncertainty, rising regulatory scrutiny, and geopolitical risks.

Global M&A deal value drops 15% to $3.2 trillion

The total value of strategic deals, those closed by corporate buyers, dropped by 6% to about $2.4 trillion, a 6% decline in value from the year before.

The impact of the slower market was however much harder felt by financial investors, with private equity and venture capital deals down 37% in value. Financial investors were more exposed to the rise of interest rates and issues of debt availability. In contrast, strategic buyers generally had stronger balance sheets with cash on hand to close deals.

Enter Gen AI in M&A

One of the trends Bain & Company uncovers in its annual M&A report is the rapid rise of generative AI in supporting dealmaking processes. A survey of 300 M&A-experts found that 16% of dealmakers currently use generative AI at some step in the deal lifecycle, with higher adoption sees at the early stages.

Global M&A deal value drops 15% to $3.2 trillion

Generative AI in the screening process can pick up targets that would not be identified with traditional tools,” said Bain & Company in its report. And: “Generative AI is helpful in parsing the mountain of data that needs to be reviewed.”

Another common use case is the use of generative AI to populate a data room, including automated filing, advanced document search, and document question and response. Among those surveyed that used generative AI for this matter, 78% said that they achieved productivity gains from the classical manual way of doing so.

Building on these and more use cases, generative AI is expected to become a trusted companion of dealmakers: 80% of respondents expect to use the technology within the next three years.