Talent, Tech, and Trade revealed as the key drivers for Mergers and Acquisitions, new research from Eversheds Sutherland shows

• Global
• Germany

09-06-2022

According to a new M&A report launched today by global law firm Eversheds Sutherland – Putting the pieces into place: The next drivers of strategic M&A – 70% of global business leaders view the “triarchy” of talent, technology, and trade as core to their future M&A business strategy.

• Talent: 72% of business leaders see talent retention and acquisition as important in their organizations’ business strategy over the next year. Three in five (62%) also believe the “Great Resignation” is acting as a catalyst for M&A as the battle for talent continues.

• Technology continues to drive organizations’ business strategies, with almost 80% of business leaders seeking to improve their cyber security and three-quarters seeking digital transformation. M&A is seen as a rapid way to absorb new technology and expertise, with 74% saying M&A was important in bridging technology gaps.

• Trade: Impacted by supply chain disruption and trade sanctions, 68% of business leaders say that increasing supply chain resilience will be a strategic M&A priority over the next year. 72% of business leaders also see increasing supply chain resilience as important to their organization’s business strategy over the next year.

o In April 2022, 60% of business leaders said supply chain dislocation as a result of the invasion of Ukraine would make vertical integration an increasingly important business strategy.

The global Eversheds Sutherland study is based on opinion research conducted in early 2022 amongst 1,200 business leaders and across 16 markets around the world. Respondants from a wide range of sectors provided both a detailed and expansive global view. In April 2022, a supplementary piece of research amongst 75 business leaders provided insight into how the ongoing invasion of Ukraine is impacting M&A activity.

Eric Knai, Partner and Head of International M&A at Eversheds Sutherland, says: “We are delighted to launch our report Putting the pieces into place: The next drivers of strategic M&A to the market. After a turbulent few years in the wider business landscape, and the conflict in Ukraine, the rapidly changing economy has prompted leaders to reflect on how to best position their organizations for the future. Our research revealed that the majority of business leaders see talent, technology and trade as the main factors impacting the M&A landscape.”

Robert Copps, Partner and head of US M&A at Eversheds Sutherland, says: “A number of factors are impacting the M&A landscape, including the invasion of Ukraine, inflation and rising energy prices, rising interest rates, stock market turbulence and the ongoing effects of the global pandemic. Notwithstanding these challenges, the study shows that organizations continue to face the same urgent strategic gaps that need to be bridged in order to grow and that they will continue to seek to bridge those gaps through M&A.”

Additional research findings:

Accelerating appetite: What dealmakers value

In an age of transparency and the ever-increasing use of social media platforms holding companies to almost immediate account, the research revealed that brand and reputation is most valued by 77% of business leaders, making it the number one factor when considering what business leaders will pay for a target. Well-established strengths such as increased market share, intellectual property and robust financial performance are equally regarded by business leaders to be essential requirements when considering an acquisition (cited as important by 74%, 73% and 72% of business leaders respectively).

Strong headwinds in 2022

Two-thirds (66%) of business leaders agree that the rise of protectionism is now creating a more complex environment for M&A and 67% believe that protectionism is making exposure to growth markets more difficult. Within additional research conducted, 74% of those surveyed agreed that the ongoing invasion of Ukraine is having an adverse effect on M&A activity owing to the direct impact of sanctions. 70% of organizations acknowledge that the ongoing uncertainty around the COVID-19 pandemic is still a significant challenge

Impact of the conflict of Ukraine

At the beginning of 2022, 70% of business leaders believed their organization’s appetite for M&A activity would increase significantly over the next 12 months. However, by April, 90% of business leaders revealed that the invasion of Ukraine was resulting in deals being cancelled or delayed, with 21% reported to be postponing all M&A activity as of April 2022.

Despite the turbulent start to the year, the market is often quick to digest major events as business leaders look to reassess and reposition. For further information on the outlook for 2022 and to read the full Putting the pieces into place: The next drivers of strategic M&A report please visit: https://www.eversheds-sutherland.com/global/en/what/publications/m-a-report/index.page

• Eric Knai
• Partner
• +33 1 55 73 41 38
• +33 1 55 73 41 38

• Robert E. Copps
• Partner
• +1 212 389 5045
• +1 212 389 5045

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