By Investing.com — Merger and acquisition (M&A) activity in 2024 has surged after a prolonged slump, marking a substantial recovery following a period of low momentum in 2022 and 2023.
Analysts at Wells Fargo (NYSE:WFC) report that both the value and volume of M&A deals have notably increased over the year, driven by a confluence of economic factors that have helped create a favorable environment for transactions.
Wells Fargo estimates that through the first three quarters of 2024, deal values rose over 25%, while the number of deals climbed by more than 10% compared to the same period in 2023.
This resurgence in deal-making is largely attributed to improving economic conditions, increased access to credit, and stabilized market valuations.
Analysts observe that corporate confidence in deal completion timelines has strengthened, largely due to greater regulatory clarity.
With economic fundamentals on a positive trajectory, companies across various sectors—including Information Technology, Financials, Communication Services, Energy, and Utilities—are pursuing acquisitions as a way to leverage growth opportunities and improve their competitive positions.
The Information Technology sector, in particular, has experienced a marked upswing in M&A activity.
The sector has reached its highest share of global M&A deal value since 2013, reflecting heightened interest in digital transformation, cybersecurity, and artificial intelligence.
This level of sector-specific engagement flags the strategic importance that tech-driven growth continues to hold for a wide range of industries.
Furthermore, Wells Fargo analysts suggest that favorable conditions are expected to persist into the near future. Factors such as anticipated lower short-term interest rates, stabilizing inflation, and strong equity markets are likely to continue supporting corporate strategies centered on acquisition.
Companies have access to ample liquidity, and many are motivated by a desire to deploy their cash reserves more actively.
This combination of supportive economic and financial conditions may extend the momentum in M&A activity well into the next year.