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Deal or No Deal?

Deal or No Deal?

With the recognition that FGS handled more deals last year than any communications firm in the world, we asked our global experts for an update on market conditions and trends in their regions.

The U.S. outlook involves regulatory scrutiny, leak risk and varied deal drivers.

1. The current regulatory and political climate remains an obstacle to completion for transactions of all sizes and sectors. The U.S. antitrust enforcement approach is to “sue first, ask questions later.” Companies and advisors must keep regulatory and political strategies top of mind from the start of preparing for an announcement. 

2. Leak risk in M&A transactions has become increasingly pronounced due to two factors. First, a more challenging interest rate and deal financing environment further heightens potential leaks. As buyers discuss financing with a more fragmented set of prospective providers—including banks, hedge funds, private credit and other sources—word is more likely to spread into the market. Second, the M&A media environment in the U.S. has become more competitive than ever with reporters vying for the same “scoop”.

3. The drivers and types of deals remain varied. We are seeing take-private transactions and portfolio optimizations—often sparked, in part, by shareholder activist campaigns—which result in companies aggressively managing costs, divesting non-core assets and exploring strategic alternatives more broadly. While there are expectations that M&A activity will pick up in the second half of the year, the landscape remains uncertain due to interest rates, market conditions and stakeholder expectations. 

Read more for our experts’ views from Europe, the Middle East and Asia.

By the Numbers

Getting Smart on AI

With the emergence of powerful AI we have a front row seat to a potential paradigm shift—including utopian benefits but also societal dislocation. 

A recent panel in our London office discussed how business leaders can prepare:

1. Focus on strategy. Don’t go looking for use cases for AI. Start with your key strategic challenges and work out how to apply AI to help solve them.

2. Choose a leader to own AI. An executive needs to understand the technology, benefits and risks, especially commercial usage of generative AI, supplier agreements and regulation.

3. Governance is critical. A robust governance model, ethical framework and practical guardrails around how AI is deployed is vital to protecting customers, employees and wider society. Doing right by your stakeholders will protect your shareholders.

4. Take a nuanced view of the technology. Thought-through and carefully monitored uses will be better than unfettered usage or blanket bans. AI will also bring data policies up the corporate agenda.

5. Upskill your workforce. Employees working with AI will be more effective and productive than those without. They need education and training, across the company. An innovation team can help drive transformation.

We All Scream for Ice Cream?

As unprecedented heat waves grip the nation and the world, FGS’ Food and Agriculture team took a look at the economic trends behind one of Americans’ favorite ways to cool down—or at least it was.

Per capita consumption of frozen dairy products—which includes ice creams and frozen yogurt among other frozen dairy products—has been declining since the 1990s, dipping to its lowest point in 2021. In 2021, U.S. residents consumed 20.3 pounds of frozen dairy products per capita, nearly 6 pounds less than in 2000. 

Consumption of regular ice cream in 2021 was estimated at 12 pounds per person, a drop of about 4 pounds from 2000. 

On the other hand, per capita consumption of low-fat and nonfat ice cream, at 6.4 pounds, was roughly the same in 2021 as in 2000. 

Consumption of other dairy products, including frozen yogurt, sherbet and miscellaneous frozen dairy products, decreased from 3.4 pounds per person in 2000 to 1.9 pounds in 2021. 

This downward trend in frozen dairy product consumption is in line with a decline in consumption of caloric sweeteners from 150.9 pounds per capita in 2000 to 127.4 pounds in 2021, reflecting shifting preference among consumers.

July 25, 2023
By Nedra Pickler and Irene Moskowitz
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