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Laxman Pai, Opalesque Asia: While M&A in the tech sector hit a multiyear low both in terms of total deal value and median valuation in 2023, the outlook for 2024 is a bit more optimistic, said a study.
According to 451 Research - S&P Global Market Intelligence total spending on tech M&A fell below the $300 billion mark last year. This marked the lowest level of spending in a decade.
The report attributed the reasons for the downturn as myriad and well-discussed: slowing demand for digitalization, rapidly rising interest rates, and a regulatory crackdown on Big Tech, among them.
But investment bankers are hopeful that the worst is behind them heading into 2024, and they expect strategic and financial buyers to be more active, especially when it comes to smaller transactions, said the report.
Major strategic players such as Meta Platforms Inc., Salesforce Inc., Alphabet Inc., Apple Inc., and Amazon.com Inc. spent 2023 largely sitting on the M&A sidelines, having collectively made just four acquisitions in tech compared with 18 in 2022, Capital IQ Pro data shows.
In the face of pressure from their shareholders and boards, as well as regulatory scrutiny, large strategic buyers focused efforts on profitability this year rather than growth through acquisitions.
Meta CEO Mark Zuckerberg famously declared 2023 "the year of efficiency," cutting 10,000 employees in mid-March after axing 11,000 positions at the end of 2022.
Meanwhile, with operations now tighte...................... To view our full article Click here
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