According to S&P Global Market Intelligence, the global mergers and acquisitions (M&A) market is showing signs of picking up in 2024 after a challenging year. In 2023, the total value of global M&A deals plummeted by 27% to $2.27 trillion, following a steep decline of over 33% in 2022. The hesitancy in the market was primarily due to higher interest rates, which deterred buyers and sellers from actively engaging in transactions. However, the fourth quarter of 2023 witnessed two significant deals - Exxon Mobil's $65 billion acquisition of Pioneer Natural Resources and Chevron's $60 billion deal with Hess. These transactions provided a glimmer of hope for a recovery in the market.
U.S. M&A Deals on the Rise
Despite the antitrust crackdown by regulators, U.S. companies are starting to regain confidence in pursuing major deals. The recent increase in large-scale transactions suggests that companies are becoming more comfortable navigating through regulatory challenges. Additionally, there is an uptick expected in initial public offerings (IPOs) and other stock issuances, with at least five IPOs scheduled to be priced this week. The fourth quarter of 2023 marked the eighth consecutive period in which total stock issuance remained at or below $100 billion. However, the IPO market is now beginning to heat up, presenting promising opportunities for companies looking to go public.
European Companies Entering U.S. Markets
European companies are increasingly looking towards U.S. markets as a way to expand their presence and attract investors. For example, Finnish sports equipment and apparel maker Amer Sports, known for its popular brands Salomon, Wilson, and Louisville Slugger, is expected to price its IPO as early as Wednesday. This anticipated deal would give Amer Sports a market value of $8.3 billion. Additionally, U.K.-based activewear brand Perfect Moment plans to raise $8 million at a market value of $101 million.
Biotech Startups Making Waves
In the biotech sector, Houston-based company FibroBiologics, a spin-off of FibroGenesis established in 2021, is preparing for a direct listing on the Nasdaq. With plans to start a Phase 2 trial of its multiple sclerosis therapy, FibroBiologics aims to raise $87 million at a market value of $644 million.
As the global M&A landscape shows signs of recovery, investors and companies alike are watching closely as the market gains momentum.
By Janet H. Cho
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