The desire to acquire

Getting deals done

What are the main factors motivating business leaders to look for M&A opportunities?

While 60% of European buyers are driven by geographic expansion, over half of US buyers are motivated by digital transformation. US and European sellers, meanwhile, are driven by geographic expansion, favorable market conditions and risk reduction. Understanding the motivations of potential partner organizations is critical to increasing companies’ M&A appeal.

Our research shows that organizations are actively seeking opportunities for M&A in order to thrive. Almost three-quarters of leaders (73%) say that proactive M&A activity is critical for organizations to prepare for an era of disruptive change, as the pace of technological, social, and geopolitical shifts propel businesses forward.

Geopolitical factors in particular have been influencing decisions to buy or sell over the last 12 months. Businesses seek stability amid market volatility, and the numerous elections across the world in 2024 have contributed to a looming sense of uncertainty. However, as we see political shifts across the globe, and businesses come to terms with the interest rate environment, M&A activity is expected to regain momentum, presenting numerous opportunities for growth and expansion.

Yet as appetite for M&A is building, the complexity of transactions is increasing, which is in turn slowing the pace. 74% of buyers say that because deals now take so long, their organizations have to take a more forward-looking view of what they will need from acquisitions.

What’s driving the desire to acquire?

What are the key factors underpinning leaders’ acquisition plans? There are some differences between the M&A motivations of US and European businesses. Geographic expansion is pivotal to European buyers, who need to extend market presence beyond their borders to thrive: 6 in 10 European business leaders say this is a factor in their acquisition plans. They are also seeking to bolster the resilience of their supply chains in the face of trade wars and war in Europe. Additionally, an increasing number of businesses are closely scrutinizing their supply chains, as many large organizations are now faced with additional compliance due to more extensive environmental reporting requirements.

“Geographic expansion remains a major motivator for M&A among European businesses; leaders of European companies see it as critical to growth, providing access to new markets, operational efficiencies, and more affordable human capital. Supply chain resilience is also top-of-mind due to supply chain challenges during the pandemic, the ongoing war in Ukraine, and concern about over dependence on China”

Jean-Patrice Labautière, Partner (Paris)

US-based buyers, meanwhile, are more focused on technology and innovation than their European counterparts: 52% of US buyers say that digital transformation is a factor in their acquisition plans, compared to just 36% of European buyers. In a bigger market with greater potential for self-sufficiency, US buyers are less focused on supply chains and geographic expansion. Instead, they are looking to acquire businesses that can boost their digital transformation, increase their exposure to growth markets (which could include AI, cloud computing, renewable energy and health tech, for example), and bring in new technology.

“This reflects a sustained trend of US businesses striving to maintain their leadership in innovation and technology. Strategic M&A provides an effective path to this goal, enabling companies with robust financials to boost their growth by acquiring firms with complementary products or services.”

Todd Kaye, Partner (St. Louis)

By acquiring innovative firms and integrating complementary capabilities, businesses can enhance their competitive edge and ensure they are well-prepared to adapt to future challenges: 82% of US buyers and 76% of European buyers say they are prioritizing acquisitions that bring new, disruptive technologies to the table, and technological capabilities come second in the list of important qualities when organizations are evaluating potential acquisition targets. Business leaders are increasingly aware that new technologies can enhance external business offerings and internal operations, making their organizations more innovative and productive, increasing customer focus, and ultimately driving profitability.

The top 5 factors driving US and European organizations’ desire to acquire

54% of US sellers say:
favorable market conditions

48% of European sellers:
raising capital to enter other regions

The top 5 factors driving US and European organizations’ desire to acquire

46% of US sellers say:
reducing risk exposure

42% of European sellers:
reducing risk exposure

The top 5 factors driving US and European organizations’ desire to acquire

42% of US sellers say:
raising capital to enter other regions

40% of European sellers:
favorable market conditions

The top 5 factors driving US and European organizations’ desire to acquire

36% of US sellers say:
monetizing investments

40% of European sellers:
monetizing investments

The top 5 factors driving US and European organizations’ desire to acquire

36% of US buyers say:
increase sales revenue

36% of European buyers:
digital transformation

What’s motivating decisions to sell?

Leaders say that market conditions are encouraging them to sell; favorable conditions are a motivating factor for 54% of US businesses and 40% of European sellers. Interest rates have begun to fall, including in the US where the Federal Reserve has started to cut rates and in the Eurozone, where the European Central Bank has also begun reducing rates and continues to do so. Financial markets have also been experiencing better liquidity conditions as investor confidence improves and trading volumes increase, partly due to stabilizing economic conditions and more positive market sentiment.

Organizations are seeking buyers for a multitude of reasons beyond monetary gain: 67% of sellers say that their motivations for selling are strategic, not purely financial. These strategic reasons include moving our of non-core regions – a factor for 48% of European sellers and 42% of US sellers – and reducing risk exposure, which is motivating 46% of US sellers and 42% of European sellers.

Compliance costs are also a factor for a third of sellers. In a complex and challenging environment, with businesses contending with fast-paced technological and regulatory changes, leaders may look to divest a division or segment that faces significant operational challenges, regulatory risks, or high compliance costs. This enables them to focus on more stable, profitable parts of their organization.

Top 5 factors driving US and European leaders’ desire to sell or divest

54% of US sellers say:
favorable market conditions

48% of European sellers:
raising capital to enter other regions

Top 5 factors driving US and European leaders’ desire to sell or divest

46% of US sellers say:
reducing risk exposure

42% of European sellers:
reducing risk exposure

Top 5 factors driving US and European leaders’ desire to sell or divest

42% of US sellers say:
raising capital to enter other regions

40% of European sellers:
favorable market conditions

Top 5 factors driving US and European leaders’ desire to sell or divest

36% of US sellers say:
monetizing investments

40% of European sellers:
monetizing investments

Top 5 factors driving US and European leaders’ desire to sell or divest

32% of US sellers say:
Compliance costs

38% of European sellers:
Attractive financial offer

The report

Getting Deals Done maps the M&A motivations of both prospective buyers and sellers, examines the complexities that are holding deals back, and considers how business leaders can get their organizations “deal-ready” to unlock the potential of M&A transactions.

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Our contributors

Learn more about our M&A practice

the Desire to acquire

What are the main factors motivating business leaders to look for M&A opportunities?

What’s driving the desire to acquire?

The top 5 factors driving US and European organizations’ desire to acquire

54% of US sellers say:
favorable market conditions

48% of European sellers:
raising capital to enter other regions

46% of US sellers say:
reducing risk exposure

42% of European sellers:
reducing risk exposure

42% of US sellers say:
raising capital to enter other regions

40% of European sellers:
favorable market conditions

36% of US sellers say:
monetizing investments

40% of European sellers:
monetizing investments

36% of US buyers say:
increase sales revenue

36% of European buyers:
digital transformation

What’s motivating decisions to sell?

Top 5 factors driving US and European leaders’ desire to sell or divest

54% of US sellers say:
favorable market conditions

48% of European sellers:
raising capital to enter other regions

46% of US sellers say:
reducing risk exposure

42% of European sellers:
reducing risk exposure

42% of US sellers say:
raising capital to enter other regions

40% of European sellers:
favorable market conditions

36% of US sellers say:
monetizing investments

40% of European sellers:
monetizing investments

32% of US sellers say:
Compliance costs

38% of European sellers:
Attractive financial offer

The report

Our contributors

Further insights and methodology

Dealing with complexities

Sealing the deal

About our research

the Desire to acquire

What are the main factors motivating business leaders to look for M&A opportunities?

What’s driving the desire to acquire?

The top 5 factors driving US and European organizations’ desire to acquire

54% of US sellers say: favorable market conditions

48% of European sellers: raising capital to enter other regions

46% of US sellers say: reducing risk exposure

42% of European sellers: reducing risk exposure

42% of US sellers say: raising capital to enter other regions

40% of European sellers: favorable market conditions

36% of US sellers say: monetizing investments

40% of European sellers: monetizing investments

36% of US buyers say: increase sales revenue

36% of European buyers: digital transformation

What’s motivating decisions to sell?

Top 5 factors driving US and European leaders’ desire to sell or divest

54% of US sellers say: favorable market conditions

48% of European sellers: raising capital to enter other regions

46% of US sellers say: reducing risk exposure

42% of European sellers: reducing risk exposure

42% of US sellers say: raising capital to enter other regions

40% of European sellers: favorable market conditions

36% of US sellers say: monetizing investments

40% of European sellers: monetizing investments

32% of US sellers say: Compliance costs

38% of European sellers: Attractive financial offer

The report

Our contributors

Further insights and methodology

Dealing with complexities

Sealing the deal

About our research

54% of US sellers say:
favorable market conditions

48% of European sellers:
raising capital to enter other regions

46% of US sellers say:
reducing risk exposure

42% of European sellers:
reducing risk exposure

42% of US sellers say:
raising capital to enter other regions

40% of European sellers:
favorable market conditions

36% of US sellers say:
monetizing investments

40% of European sellers:
monetizing investments

36% of US buyers say:
increase sales revenue

36% of European buyers:
digital transformation

54% of US sellers say:
favorable market conditions

48% of European sellers:
raising capital to enter other regions

46% of US sellers say:
reducing risk exposure

42% of European sellers:
reducing risk exposure

42% of US sellers say:
raising capital to enter other regions

40% of European sellers:
favorable market conditions

36% of US sellers say:
monetizing investments

40% of European sellers:
monetizing investments

32% of US sellers say:
Compliance costs

38% of European sellers:
Attractive financial offer