The year 2024 will be an exciting year for Merger and Acquisition (M&A) deals as global M&A activities are expected to surge during the year, banking on rosy macroeconomic outlook, decelerating inflation and interest rate normalization in the second half of this year. M&A opportunities will particularly be derived from sectors facing massive transformation in their industry, such as technology and telecommunication sector, in line with rapid growth in digital technology for the past few years, as well as financial sector which face challenges from digital technology disruption on their business models. In addition to that, looming energy crisis may accelerate the energy transition towards renewable energy, thus providing room for M&A activities from this sector. Lastly, the healthcare sector, particularly the biotechnology companies may seek M&A opportunities to support new research in the healthcare sector. Mounting research cost is believed to push consolidation in this sector in the future.
Nevertheless, the forthcoming M&A potential may differ from the previous deals. High borrowing cost for long period of time will give pressure to the cost of capital and valuation, pushing the dealmakers to revisit their strategy to provide optimum return to corporate customers who intend to leverage on the M&A momentum.
In Indonesia, M&A trend may also embark on the new growth trajectory. The evolving market dynamics necessitates agile business models and robust strategy capable of adapting effectively. Among the most substantial mergers in 2023 is the merger between Telkomsel and Indihome amounting to Rp58 trillion. One of the merger objectives is to achieve the digital inclusion in Indonesia, consistent with the Fixed Mobil Convergence (FMC) initiatives promoted by PT Telkom as the parent company. The merger between Telkomsel and Indihome has basically supported the business transformation of TelkomGroup to be the leading telecommunication company in Indonesia. Mandiri Sekuritas is one of the dealmakers in this transaction, supported by its strong, seasoned and trustworthy investment banking team.
The evolving and demanding business landscape will make M&A strategy a compelling option to boost the corporate values. Redefining the strategy, establishing more responsive business model to cope with the current market dynamics – including shorter product lifecycle and the pressure to implement green-oriented development (ESG) have become issues underlining any business decision. When the Company’s profitability eroded or when the investment potential arises which push forward a higher corporate valuation, the M&A strategy is worth considering. Please liaise with Mandiri Sekuritas to become the reliable partner in providing the best business solution to all corporate clients.