CEOs are leveraging M&A for tech-driven growth and market expansion, embodying innovation and sustainability in a dynamic business landscape, explains Fergal McAleavey

In the rapidly evolving business landscape of 2024, global CEOs continue to use mergers and acquisitions (M&A) to navigate innovation and transformation across their businesses. 

The latest CEO Outlook Pulse Survey from EY shows businesses are engaging in M&A activity with renewed vigour, considering it a strategic support for addressing key priorities.

The survey found that acquiring technology, new production capabilities and innovative startups, growing market share and accessing new geographies stood out as the top three strategic drivers for CEOs pursuing M&A.

Irish M&A: growth and innovation

In Ireland, the M&A landscape is particularly vibrant, with CEOs and investors showing a keen interest in a variety of transaction opportunities, from trade sales to private equity investment to strategic alliances.

Ireland's thriving tech sector and business-friendly climate have fuelled a boom in deal-making, outpacing the UK and EU. This is likely to continue as companies pursue innovative technologies and seek to capitalise on the entrepreneurial energy of startups that have scaled.

The strategic imperatives for Irish M&A are expected to align with global patterns, emphasising the acquisition of larger market shares, expansion into new markets, and the integration of advanced technology into existing operations. This is especially pertinent for Ireland, given its status as a European tech hub. 

Ensuring strategic objectives are met

CEOs are also signalling their readiness to streamline their portfolios, shedding assets to address ESG goals and refine their focus for the challenges ahead.

Sustainability due diligence is playing an ever-increasing role in M&A transactions to assist buyers and sellers to ensure that those deals are aligned with their own corporate sustainability objectives.

This strategic deal-making is not merely a short-term solution but is part of a broader, long-term vision to build resilience and adaptability for an unpredictable future.

Irish CEOs' strategy

With global funding markets more receptive in 2024, Irish acquirers may find it easier to secure financing for deals and may be the target of larger companies seeking to expand their geographic footprint or product offering.

However, they must remain cautious of potential market tightening as political events unfold.

For those looking to divest, the market's increasing appetite for acquisitions and the continued resurgence of private equity (PE) could provide favourable conditions.

Nonetheless, the timing of PE's full-fledged return to the M&A space remains a little uncertain for large transactions as they await potential interest rate decreases, particularly in the Eurozone and the UK.

Irish companies must stay attuned to shifts in monetary policy that could influence the M&A landscape. 

To provide corporate sellers with more control over M&A transactions, particularly as a counter-measure to lengthy deal timelines that have become a feature of the M&A market in the last few years, time is well spent by those sellers preparing potential divestment assets for sale, including anticipating issues of particular relevance to likely buyers of those assets and identifying potential regulatory approval requirements that may add to longer deal timelines.

Sell-side due diligence of prospective buyers can also be warranted to help flush out any potential roadblocks or delays that may arise from ever-increasing competition law, foreign direct investment and foreign state aid regime requirements. 

The M&A momentum for the remaining months of 2024 is characterised by strategic foresight, adaptability, and a commitment to sustainability, as both global and Irish corporate leaders and investors navigate the complexities of a rapidly evolving business world.

Fergal McAleavey is Partner of Corporate Finance – Strategy and Transactions at EY