As mergers and acquisitions (M&A) activity picks up pace, the supply chain sector is playing a pivotal role in this resurgence, with significant deals marking its influence on the market’s recovery.
Supply Chain-Driven M&A Surge
The landscape of global mergers and acquisitions is witnessing a notable recovery, with the supply chain sector at the forefront of this resurgence. Data from GlobalData indicates a 38% increase in total M&A deal value in Q1 of 2024 compared to the same period in the previous year, despite ongoing economic challenges such as high interest rates and sluggish growth.
Key Transactions and Trends
The first quarter of 2024 saw supply chain-related M&A transactions reach a staggering US$52 billion over 19 deals, dominating the top 150 deals by theme. Factors such as geopolitical tensions, population growth, environmental, social, and governance (ESG) considerations, e-commerce expansion, labor shortages, and digital transformation have all fueled a heightened focus on supply chain investments.
The largest supply chain deal was Novo Holdings’ acquisition of Catalent at US$17 billion, leading the healthcare sector’s M&A activity. This was followed by Novo Nordisk’s strategic acquisition of three fill-finish sites from Novo Holdings for US$11 billion, and Japan Investment Corporation’s significant investment in JSR, acquiring a 66.7% stake for US$6 billion.
North America continues to lead in M&A deal volume and value, while other regions like South America and the Middle East and Africa have experienced declines both year-on-year and quarter-on-quarter.
Outlook for 2024
The M&A outlook for the remainder of 2024 is cautiously optimistic, with potential rate cuts and an improving global growth forecast potentially spurring increased activity. However, mega deals, particularly in the US, may encounter regulatory challenges due to antitrust scrutiny.
