According to Willis Towers Watson, 2021 saw the biggest boom in mergers and acquisitions since 2008 with 1,047 deals valued at more than $100 million worldwide. Its report explains that this will likely continue throughout 2022.
While the findings are referring to mergers and acquisitions as a whole, this is especially true for the supply chain industry as the M&A sectors was especially prevalent here. Acquisitions in the supply chain started heating up in the sector shortly before the pandemic due to the increase in online shopping and an interest in supply chain technology, as many of the transactions were seen in the software and tech side of things. But once the Coronavirus (COVID-19) pandemic hit in 2020, these transactions were largely put on hold as the world tried to navigate the unknown disruption. Now that we have settled into the “New Normal,” the M&A sector is back on and heating up.
In the supply chain specifically, companies look desperately to bridge the gaps occurring throughout the industry caused by the pandemic, natural disasters, civil unrest, cyber attacks and many other factors. One way the industry looks to over come these problems is through mergers and acquisitions. Re-shoring and near-shoring are now buzz words in the supply chain, and M&A is one way to achieve this.
Willis Towers Watson explains that while we’re in an economic downturn, the unprecedented amount and mix of capital for deals from private equity firms and other investors indicates an increased capability and desire to do deals through downturns. The drive in M&A throughout 2022 will likely lie heavily within the technology sector.
Another report from KPMG says that nearly half (49%) of U.S. CEOs indicated they will likely undertake acquisitions that have a significant impact to their overall organization, while 37% said they will make acquisitions that have a moderate impact to their overall organization.
I’m not sure if M&A is the answer to our supply chain woes but I’m interested to see where it will take us.