Swiss M&A Trends 2024 Outlook

M&A momentum is picking up: Are you ready to seize the opportunities

In 2024, M&A activity is expected to pick up remarkably. Following a significant downturn, one of the most severe in the past decade, there are now signs of an emerging upswing. While the pace and strength of this recovery is still subject to macroeconomic and geopolitical uncertainties, early indicators point to a gradual increase in dealmaking as the year progresses. Indeed, an outbreak of M&A activities in recent months suggests that this rebound in dealmaking may have already begun in some sectors.

However, this year’s M&A landscape differs from previous periods. The surge in activity seen in late 2020 and 2021 is unlikely to be repeated. Instead, the market is adjusting to new conditions: tighter credit markets are leading to more expensive financing – funding is more costly than it has been in a decade – with respective impact on valuations and deal structures. In 2024, dealmakers will be challenged to adapt to these changing dynamics; to generate the same return as before, they will need to create more value. Those adept at risk assessment and scenario planning are likely to be more successful in this evolving environment. Overall, the M&A sector is set for steady growth in 2024.

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“In 2024, the key to successful dealmaking lies in strategic foresight and embracing megatrends such as AI, climate change, and demographic shifts. It’s about using transactions not just for growth, but as decisive steps in a company’s transformational journey.”

Marc SchmidliPartner, Deals Leader, PwC Switzerland

Three drivers of M&A optimism

Our optimism is based on three key factors:

Financial markets are showing signs of recovery, which is essential for a healthier M&A market. Interest rate hikes are expected to be reversed, with predictions of US rate cuts possibly starting in March. This could lead to more stability in financing, making it easier to price, execute, and plan deals.

The dip in M&A activity during 2023 has created a backlog in demand and assets, compounded by private capital’s urgency to deploy its significant ‘dry powder’. Concurrently, corporates are adapting to global shifts in terms of digitalisation and decarbonisation, driving them towards M&A in order to scale, innovate, or streamline their operations for strategic growth.

There’s an urgent need for companies to adapt and transform quickly, with M&A serving as a pivotal tool for this swift evolution. This shift towards rapid value creation and transformation is characterised by an increased use of technology and a focus on reducing emissions, which is essential for staying competitive in today’s dynamic environment.

Four takeaways for deal makers

Speed up your dealmaking: With high competition for quality assets due to pent-up demand, speed and preparedness in dealmaking will be critical. The emerging use of AI to streamline transactions and decision-making processes will further accelerate this dynamic – and dealmakers should get the buy-in of key stakeholders well in advance.

Reinvent your business model: In response to global megatrends such as technology and climate change, business leaders must adapt quickly, find new sources of value, and manage risk. CEOs who embrace a holistic strategy that includes operations, sustainability, and compliance will be better equipped to drive sustainable growth and strategic progress.

Secure the right talent: Generative AI will be deployed on a larger scale as companies seek to leverage technology and transform. Acquiring the right talent becomes crucial for value creation. Dealmakers must assess the required capabilities and ensure that strategies are in place to retain key talent post-deal.

Be bolder: Despite many reasons for hesitation, such as macroeconomic uncertainties and rising capital costs, the next wave of M&A is imminent. Companies should carefully weigh the pros and cons, but not let the challenges get in the way of action. Staying ahead in a rapidly changing market means acting now. Follow this link, uf you want to learn more about the M&A activity in Switzerland in 2024.

Key insights for Switzerland

  • The Swiss M&A market is strongly driven by strategic players across all sectors. Swiss multinationals as well as mid-market companies are focused on unlockingthe value creation potential of transformational deals, both on a national and an international level. 
  • The value of such deals is linked to strategic repositioning, portfolio optimisation, digitalisation, business model changes, and yet untapped opportunities such as green tax credits and sustainable financing.
  • In addition to a strong focus on value creation, future transactions might be supported by a relatively stable economic environment with moderate interest rates and lower inflation compared to other countries.

Visit our blog post for further insights into the development of dealmaking and our predictions for its future direction. Gain an in-depth understanding of the special dynamics of the M&A landscape in 2024 with our blog series. Explore our detailed analysis and predictions on dealmaking trends and strategies across sectors and get the knowledge you need to navigate this transformative year.

Read the M&A Trends blog

“Don’t let this M&A upturn take you by surprise. It’s coming, and when it does, it won’t be like the ones we have seen in the past. Deal returns will be under greater pressure, and the companies that will ultimately come out on top are those that can demonstrate strategic value, are well prepared and can move fast.”

Brian LevyGlobal Deals Industries Leader, Partner, PwC US

Industry takeaways for Switzerland - developing

Learn more about the key trends driving M&A activity globally in 2024. For potential investment hotspots check out our global industry-specific takeaways below.

And how about the situation in Switzerland? In the next few weeks, our industry experts will be sharing their views and expectations of M&A trends in Switzerland ‒ so please stay tuned.