Despite the impact of high interest rates and low growth across all the major economies, the total deal value of mergers and acquisitions (M&A) increased by 38% in the first quarter of 2024 compared to the same quarter in 2023, according to a new report by GlobalData.

The data and analytics company also noted that the supply chain has emerged as a prominent theme in helping the recovery of global M&A activity in the quarter.

In its latest report, "Global M&A Deals in Q1 2024 – Top Themes by Sector – Thematic Intelligence," it said that supply chain-related deals totalled US$52 billion across 19 deals in Q1 2024, making it the largest theme among the top 150 deals.

Priya Toppo, a GlobalData thematic Intelligence analyst, said an increase in geopolitical tensions, population growth, ESG (environmental, social, and governance) considerations, rising e-commerce activities, labour shortages, and digital transformation have all contributed to a greater focus on supply chain-related deals.

Toppo added, "This was especially true in the consumer, basic materials, transportation, infrastructure, logistics and industrial sectors."

The GlobalData study said that the biggest supply chain deal was Novo Holdings' acquisition of Catalent for US$17 billion — which was also the biggest in the healthcare sector in Q1 this year.

This deal was followed by Novo Nordisk's acquisition of three fill-finish sites from Novo Holdings for $11 billion and Japan Investment Corporation's acquisition of a 66.7% stake in JSR for US$6 billion.

Toppo noted that an ongoing trend is North America's dominance in M&A deal activity, accounting for 3,007 deals worth US$385 billion during Q1 2024.

Nevertheless, South America and, the Middle East and Africa saw a decline in deal value both on a year-on-year and quarter-on-quarter basis.

Outlook remains "cautiously optimistic"

"The M&A outlook for the rest of 2024 remains cautiously optimistic, as the prospect of rate cuts in certain markets and a generally improving global growth outlook could see an increase in activity throughout the year," Toppo said.

"Mega deals will continue to face hurdles, especially in the US, where antitrust concerns have been a focus of regulators," the GlobalData thematic Intelligence analyst added.