The deal market in 2024 is likely to witness an increase in activity following the challenges of 2023. Inflation has been http://thisdataroom.com/virtual-data-room-tool-for-legal-professionals/ slowed, and could even begin to fall, interest rates have stabilized (though they are unlikely to return to pre-pandemic levels) Private credit is becoming available for a wider range of deals, and traditional equity markets have gained ground, reaching record highs.

However, a variety of factors will hinder deal-making. The first reason for the slowdown in M&A activity is mostly due to capital limitations. The economic environment has changed because of increasing interest rates, making it less attractive to invest in growth through acquisitions and new investment. This is particularly true for the US which drives a large part of the global deal value as well as two-thirds of the top 100 deals of 2021 either an US company or targets.

Second, increased regulatory scrutiny is limiting M&A. National security, antitrust and other concerns are increasing the scrutiny of larger deals, and limiting consolidation opportunities. The trend is expected to continue through 2024.

Thirdly, the focus on generative AI (GIA) will drive more capabilities-building M&A. Companies that don't have the skills or time horizon to develop GIA capabilities internally will turn to M&A to acquire these capabilities. Finaly, the environmental social and governance agenda continues to gain momentum with CEOs. Increasingly, they will seek to bolster ESG initiatives through acquisitions that will help them reach their earnings, growth and valuation goals.