Belgian M&A Survey 2024

Companies are increasingly leveraging transformational mergers and acquisitions (M&A) and carving-out non-core businesses to adapt to modern challenges. 

Our survey indicates that 70% of Belgian M&A players have revised their strategies, whereby corporate buyers (42%) intend to carve-out part of their business with the intent to sell it to a third party. This is not a surprise as companies need to reinvent themselves if they want to survive in this changing world with technological disruption, climate change, sustainability, inflation, and energy price uncertainties. This need to change was also confirmed in PwC’s 27th Annual Global CEO Survey.

In 2023, financial investor deals declined due to higher capital costs and geopolitical insecurity. Indeed the past year 59% of the financial buyers participating in our survey confirmed they were in an exit modus, while at the same time focussing on the transformation in the portfolio entities.

For 2025, financial investors expect to do more acquisitions than last year (90%) and plan to work on their buy and build strategy (68%). Corporates also remain interested in doing deals (93%), while simultaneously carving-out business (41%) and transforming their current business (39%). Seems like an exciting year ahead!

Our M&A Survey highlights the growing importance of technology, particularly AI, in mergers and acquisitions (M&A). Executives are now focusing on AI to enhance business value and streamline the M&A process. Technology due diligence, including IT and cyber assessments, is critical in evaluating a company's technological footprint, identifying risks, and uncovering opportunities for improvement. Although not always the primary focus, this assessment supports informed decision-making and effective negotiations.

AI, especially Generative AI (GenAI), is transforming deal reviews by automating complex tasks such as contract analysis, financial record assessment, and tech stack evaluation. While many respondents are not yet actively using AI in M&A, there is significant interest in exploring its benefits further. AI enhances efficiency and innovation, helping companies build trust with stakeholders and improve product or service quality.

Despite the rising importance of AI and technology, IT and cyber due diligence remain low priorities in transactions. However, the survey indicates a trend toward increased attention to these areas as technology's role in M&A grows. The chapter underscores AI's potential to act as a valuable assistant rather than a replacement, enhancing human involvement and strategic decision-making in M&A activities.

In terms of refinancing, there's a notable increase in respondents planning to refinance their debt, with 34% having done so in the past year and 36% planning to do so in the coming year. This suggests an anticipation of potential interest rate decreases. Corporate investors (47%) are more likely to revise their financing strategies compared to financial investors (25%), with the former leaning towards more debt and the latter towards alternative instruments due to leverage differences.

Only 38% of overall respondents are considering alternative financing due to inflation and traditional financing limitations. However, 59% of financial investors foresee needing alternative financing, a significant increase compared to 2021. Potentially this shift is driven by the flexibility of private markets,  stricter requirements from traditional lenders, including ESG considerations and of course the inflated interest rates.