A new report that revealed a more positive outlook for mergers and acquisitions in the next 12 months across all sectors in Ireland.
Aon’s M&A in Ireland 2024 Report, which surveyed 331 businesses across Ireland between June and July 2024, found that more than 35% of companies were either actively considering or may consider engaging in a merger or acquisition in the next 12 months. The numbers actively considering engaging in M&A rose to 14% from 11% last year.
Nearly half of technology, media and telecoms businesses (48%) were considering targets in EMEA outside Ireland, while 20% were looking at targets in North America and 31% at the rest of the world.
Protecting and growing market share (42%) was the top reason why businesses are considering M&A activity, followed by increasing business efficiencies (38%) and expanding into new areas (37%).
More than a third of businesses (34%) were considering M&A targets across multiple jurisdictions. The rest of EMEA (outside of Ireland) was the top overseas region (35%) for intended activity followed by North America (18%).
Human capital has emerged as the top due diligence priority for businesses outside of the traditional considerations of legal, tax and financial. More than half of businesses (55 percent) rated people related factors as a top consideration, a 13 percent rise on last year.
A tight labour market and skills shortages continue to impact companies, with staff retention (55%) highlighted by business leaders as the most important human capital consideration. Some 42% of leaders highlighted comparing target employees’ compensation & benefits to existing staff as a key consideration for M&A activity.
Legislative change is also causing businesses to increase focus on human capital. The introduction of pensions auto enrolment (42%) is the most significant legislative concern for businesses, with its introduction in January 2025 potentially impacting labour costs. A third of decision makers were concerned about the introduction of pay transparency/gender pay gap reporting, with the landmark EU Pay Transparency directive due to come into force in June 2026.
Clodagh Rochford, head of M&A and transaction solutions at Aon Ireland, said: “With the pace of inflation slowing and lower interest rates beginning to reduce the cost of capital, dealmaking conditions have undoubtedly improved over recent months. This is clearly reflected in the findings of our M&A in Ireland 2024 report which reveal that more businesses in Ireland are considering mergers and acquisitions than at any point in the last two years. Those who have engaged in M&A activity over the past 12 months have reaped the rewards.
“However, the risk environment continues to grow in complexity. From cyber security and climate change to an evolving human capital landscape, businesses need to broaden their due diligence to take account of the changing business landscape and how evolving risk can impact valuations and possibly derail a deal.
“Given the high rate of successful transactions and possibility of further interest rate cuts in the second half of the year, there is good reason to believe that activity will further accelerate in the months ahead. However, with significant legislative changes on the horizon and heightened geopolitical tensions, businesses continue to navigate a complex and rapidly evolving M&A landscape.”
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