We predict that AI and all areas of consolidation like retail and TMC will deliver strong deal volumes in 2024 in Germany.

We anticipate that mid-cap transactions will dominate the market in France in the coming months and that investment funds have substantial liquidity to inject into the markets.

A strong interest will remain in the Belgian market for acquiring companies that successfully deploy AI solutions in their business models or client strategy, or that can help clients build a more sustainable business.

We foresee that areas where M&A is expected to be strong in Spain in 2024 include real estate, energy, the internet, software and IT services.

PE funds will continue to play an increasing role in the market. We expect mid-market funds focused on the Italian market to continue supporting M&A volumes until the end of 2024. The pipeline of large market transactions is expected to resume. These will see large international funds entering the scene, which are well placed to seize opportunities.

The healthcare, pharma, consumer and infrastructure sectors will continue to be resilient. There is also likely to be interest in niche sectors related to professional development, such as education, personnel training and recruitment, and talent management. We predict that there will also be continued interest from domestic and foreign industrial buyers in traditional Made in Italy sectors.

We expect to see a continuing increase in healthcare transactions in the UK. Travel is also expected to make a resurgence, having become unpopular during the COVID years. Tech (in particular software and data/cyber/digitalisation consultancies) will continue to be popular, as will professional services. Real estate-based/projects M&A seems to be coming back quicker than expected too.

This year the UK will see significant numbers of PE-backed deals entered into in the relative bull markets running up to 2020 coming into maturity, so despite pricing adjustments in the tech space, PE firms will need to make divestments in this space.

We expect that purchasers will want to minimise risk and, given the high-interest rates, will want to take a different approach on leveraged transactions. As such, we expect that deal structures will focus less on 100% takeovers with as high a leverage ratio as possible. Instead, we expect that transactions will be cut up in several tranches, that earn-outs will become increasingly popular for purchasers and that flexible financing structures such as warrants and convertible notes will happen more often. We expect 2024 to be a buyer's market in terms of deal terms. Furthermore, we expect the energy, climatetech, lifesciences and foodtech sectors to show more resilience against the current market trend.

In Poland we expect the key sectors will be IT, gaming, lifesciences and healthcare and manufacturing.

In France, we anticipate the following are key areas for M&A in 2024:

(i) There will be an emphasis on deals of a smaller scale.

(ii) Digital transformation will remain one of the main drivers for M&A transactions, particularly in relation to the cloud, cybersecurity and new technologies such as generative AI.

(iii) ESG regulations and climate warming will be increasingly taken into account in M&A transactions. ESG factors will be integrated into due diligence processes, deal structuring, negotiations, and post-merger integrations, making them integral to the success of M&A deals.

(iv) There will be an increase of the number of cross-border M&A transactions. This will require a deep understanding of global regulations and diverse cultures.

A reduction of interest rates in the second half of 2024 will likely spark M&A activity (including of real estate businesses). We expect that the focus will be on innovative and transformative businesses that are active in AI, ESG and digital transformation.

The National Recovery and Resilience Plan remains a huge opportunity to support Italy's modernisation process, particularly in relation to specific topics such as digital transformation, innovation and energy transition.

Italian companies are very clear about the importance of expansion into foreign markets and how M&A activity today can be a relevant accelerator of this process. We expect the continuance of the trend of nearshoring and friendshoring.

Energy transition, driven by an increased awareness of sustainability issues and the need to reduce energy costs and digital transformation and the need for major infrastructure interventions will require significant investments to achieve the goals set by the National Recovery and Resilience Plan and meet the new needs of consumers and businesses.

There are record amounts of dry powder in the PE markets, with many investors having raised new funds. There is therefore a lot of money to be spent and we are expecting an uptick in UK PE deal activity during 2024. It is likely that this will cause a shift towards more seller-friendly deal terms (for example, earn-outs will reduce in application and leaver provisions on strip could return to the more management-friendly position of the past).

We expect the M&A market to pick up in terms of deal volume and there are many UK assets which will start to look attractive again. We also expect the UK public equities market to pick up on the back of the attractive pricing of UK assets.