PROFIT | M & A STRATEGY
When it comes to M & A strategies where ESG is the central driver , there are three main plays , according to Rochel Hoffman , M & A Partner , Deloitte Australia :
• Product plays – investing in businesses whose core product and services drive ESG improvement , such as waste management
• Infrastructure plays – investing in companies that provide the underlying infrastructure for sustainable solutions , such as those in vertical farming
• Technology plays – investing in businesses that are using disruptive technologies to displace the market by creating new product categories , such as those cultivating meat in laboratories
“ Following the uncertainty of the last two years , where markets and the world were heavily impacted by COVID-19 , we ' ve seen just how important M & A can be in the good times and the bad ,” Hoffman tells Business Chief .
“ Today , market conditions are fluctuating once again , with economic headwinds and geopolitical tensions . During times of uncertainty or ' crisis ', M & A is an effective tool for safeguarding for the future . The right deals can help to defend against threats in the market , whilst building the agility and preparedness required to effectively manage future challenges .”
Taj Lalli , Corporate Finance Director at KPMG UK believes M & A is crucial right now to deliver growth . Business owners and managers are dealing with constraints on a daily basis , be that input challenges from a recovering supply chain , people issues due to well publicised recruitment and retention problems , or global energy constraints . All of this puts pressure on delivering organic growth .
“ In the financial markets , lenders and shareholders are actively seeking ESG opportunities , and crucially , presenting companies with the opportunity to reduce their cost of capital . Within organisations , corporate values and purpose are also driving change . We ’ re seeing that as a key battleground in the recruitment and retention of staff ”
Taj Lalli Corporate Finance Director , KPMG UK
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