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AI to reignite global M&A market in 2024, says WTW

21st November 2023 - Author: Kane Wells

Artificial intelligence (AI) is seen as a “potential boon for improving M&A processes and value creation,” according to Jana Mercereau, Head of Corporate M&A Consulting, Great Britain at WTW.

As per WTW, historic levels of inflation, rising interest rates, and geopolitical instability contributed to a “slump in deal activity that bottomed out in the second quarter of 2023.”

Since then, however, the firm said more dealmakers have returned to the negotiation table, with global deal completions increasing by 16% during July to September, according to research from the firm’s Quarterly Deal Performance Monitor (QDPM).

Aforementioned Mercereau explained that as we move into 2024, macroeconomic uncertainty and regulatory challenges are “likely to weigh heavily on overall deal activity.”

Though she added, “A renewed focus on technology, particularly AI, should however provide its own impetus for mid-market deals and bolt-on acquisitions that help boost overall activity levels as strategic and financial buyers take advantage of better-priced opportunities for growth.”

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Mercereau observed that a seismic shift in investment focus towards AI is expected in 2024, noting that although dealmakers have expressed reservations about AI, “companies are increasingly directing their attention and resources toward AI-based businesses.”

Mercereau continued, “This breakthrough technology and the technical talent within AI start-ups are also being seen as a potential boon for improving M&A processes and value creation. From enhancing efficiency through automation to fostering innovation, AI’s potential is vast.”

She concluded, “Deal success, however, will also depend on the buyer’s ability to build a culture that supports innovation with AI and its power to enhance the employee experience.”

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