A new M&A wishlist

Global merger and acquisition (M&A) priorities are starting to shift as inflation, geopolitical uncertainty, supply-chain disruptions, and a talent crunch create significant pressures on businesses, according to a recent study.

That study, from global law firm Eversheds Sutherland found that more than 70% of business leaders are looking to “a new ‘M&A triarchy’” of talent, tech, and trade to “deliver future business success.”

The report, titled “Putting the pieces into place: The next drivers of strategic M&A,” surveyed 1,200 business executives from around the world in the first half of 2022 about their strategic views of M&A and how M&A can help unlock value.

The report found that organizations are using M&A to solve the following:

Talent: The talent crunch is weighing on organizations; 62% of respondents said that the Great Resignation “is acting as a catalyst for M&A,” while 72% saw “talent retention and acquisition as important to their organization’s business strategy over the next year,” which could, in some cases, lead to “acqui-hiring,” when a company buys another company mainly to absorb its workers. However, 67% had “concerns about talent retention making M&A a riskier investment,” especially if key personnel left as the result of an acquisition.

Technology: Nearly three-quarters of respondents (74%) said M&A was a way to bridge technology gaps.

Trade: To help respond to the supply-chain disruptions of the last several years, 68% said that “increasing supply-chain resilience will be a strategic M&A priority.”

However, the study noted that almost two-thirds of respondents said that M&A activity “was already slowing in 2022,” and uncertainty around the war in Ukraine “has decelerated activity even further,” dampening M&A enthusiasm.—DA