‘International deal volume grows by fifty percent’

Lower interest rates, falling inflation and economic growth are the driving force.

International deal volumes will increase by fifty percent this year, compared to last year. Growth will increase as concerns about interest rates, inflation and recession diminish. This is what Morgan Stanley predicts.

“We believe this ‘winter’ for mergers and acquisitions is thawing and activity will return”, the major bank said. Demand for AI and cloud capabilities, the transition to clean energy and innovation in life sciences will also drive M&A activity.

Morgan Stanley expects Europe and the North American regions to benefit most from the revival of M&A activity. But India, Australia, South Korea, Japan and the ASEAN countries will also benefit.

Last year, global deal volumes fell 35 percent, the lowest level since 2004, before adjusting for inflation. As a share of U.S. nominal gross domestic product, deal activity was the lowest in at least three decades, Morgan Stanley said.

The banking company believes that most deals will be made in the healthcare, real estate, basic services and technology sectors. Cash and debt are more attractive for financing deals than payment in shares, the forecast continues.

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