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M&A volume likely to rise 20% this year, with PE deals increasing 16%, study shows

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M&A abbreviation - mergers and acquisitions, on wooden cubes on a light background.

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Merger and acquisition volume is forecast to rise 20%, following a 17% contraction last year, and almost double the 12% predicted in a similar survey in January.

“This would represent a return to near pre-pandemic levels of activity, with the number of deals in 2024 only about 4% below the average number of deals in 2017–19,” according to EY-Parthenon Deal Barometer report released earlier this month.

Through April, there has been a 69% increase in deal value y/y and a 22% increase in deal volume y/y for transactions over $100 million.

Private equity deal volume is forecast to rise 16% y/y, following a 15% contract last year and compared to 13% predicted in January, according to the survey.

“While this would still leave deal volumes below the 2021 peak, it would represent a faster pace of growth than the average 9% annual pace from 2010 to 2019,” according to the survey.

Through April there have been 429 large deals (over $100 million) totaling $657 billion in the U.S. Technology represented the most with 113 deals totaling $154 billion, followed by life sciences with 72 deals totaling $96 billion and energy with 64 deals totaling $152 billion.

Peter Orszag, CEO of M&A advisory and asset management firm Lazard (NYSE:LAZ), said that M&A is picking up after a “terrible” year last year and PE deals are starting to perk up a bit.

“Strategics (companies) are back on the playing field and the next stage is for sponsors, private equity, to become more active also,” Orszag told CNBC in an interview on the business network on Wednesday. “That is starting to happen, and would accelerate … when the Fed pivots to a rate cut.”

Orszag, a former director of the US Office of Management and Budget in the Obama administration, said that some of the US regulatory agencies’ focus on antitrust matters appears to be “problematic.” He specifically cited a new task formed by the Department of Justice earlier this month that focuses on healthcare.

“It seems to be focused on vertical integration in healthcare,” Orszag explained. “That would be the last place I would be focusing because the evidence suggests that vertical integration does lead to efficiencies in healthcare.”

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