Mergers and Acquisitions – By Industry, and by Trend

Mergers and acquisitions – often shortened to ‘M&A’ – are a fundamental part of the business landscape between and across industries. They are the mechanisms by which innovation and growth are realised, as investment and resources from larger businesses spark development and expansion in smaller divisions. There are innumerable examples of the impacts mergers and acquisitions have had on individual markets, but sometimes little in the way of understanding regarding specific motivations. 

It is true that certain industries are more likely to see merger and acquisition activity than others. But why is this the case? And what are the motivations behind this behaviour, for the industry and for the businesses involved in such activity?

Technology and Software

The tech industry is one of the fastest-growing at present, with major thanks to the development of new frameworks and protocols on which the futures of many individual markets are expected to hinge. High-concept developments, such as those in quantum computing, are expected to engender fundamental shifts in industry development, while consumer software innovation continues to create new income streams.

This dynamic industry is the perfect breeding-ground for merger-and-acquisition activity, as smaller businesses with a stellar idea become extremely lucrative investment opportunities for more cash-rich enterprises. The result is that profitable ideas receive enviable seed funding from organisations equipped to market the ensuing innovations widely.

Financial Services

Financial services benefit greatly from mergers and acquisitions as well, for unique reasons but also as a result of some close links to the tech industry. Indeed, a new sub-industry in ‘fintech’, or Financial Technology, has become a major disruptive influence in contemporary markets – with the UK being a central hub for said new industry.

Mergers and acquisitions have stoked growth in this industry and in the wider financial services sector, as unique concepts beg for greater executive control and industry stature. New and shifting regulatory requirements require a keen understanding of corporate law, incentivising businesses with robust links to legal firms to take on fresh risks with new financial products and innovative teams.

Healthcare and Pharmaceuticals

Healthcare is something of a complex industry to consider when it comes to mergers and acquisitions, particularly when it comes to the public face of private healthcare enterprises. The NHS holds an extremely special place in the heart of the British public, and yet relies heavily on private industry infrastructure and innovation to survive. Many are concerned that acquisitions will eventually track over into legislation, and that public healthcare is not long for being dismantled.

However, this fundamentally misunderstands the relationship between private and public – one which many businesses rely upon for sustainable profits. Larger pharmaceutical companies buy up younger, fresher ones in order to buy up talent and patents, which are in turn marketed via public healthcare avenues as well as private ones. In this way, there is a quiet symbiosis between markets – driven by investment, mergers and acquisitions.