2024 Mid-Year Outlook

Global M&A Trends in Technology, Media & Telecommunications

Global M&A Industry Trends in Technology, Media & Telecommunications hero image
  • Insight
  • 9 minute read
  • June 25, 2024

Dealmakers are adapting to dynamic conditions in the technology, media and telecoms sectors with the pendulum likely to swing back in favour of M&A once more.

Barry Jaber

Barry Jaber

Strategy&, Global Technology & Telecoms Deals Leader, Partner, PwC United Kingdom

Bart Spiegel

Bart Spiegel

Global Entertainment & Media Deals Leader, PwC United States

Halfway through 2024, there are reasons for continued optimism about dealmaking in the technology, media and telecommunications (TMT) sector. The positive indicators we identified in our 2024 M&A Outlook—advances in generative AI and other new technologies, increased certainty around interest rates, record capital to invest and pent-up demand for dealmaking—still hold true. In the first six months of 2024, there have been some early signs that IPOs and technology megadeals are making a return. Higher interest rates, inflationary pressure, geopolitical factors and uncertainty around election results later this year may restrain some dealmaking activity, but we expect M&A to pick up again once conditions start to improve. 

72%

of TMT CEOs believe technological change will drive changes in the way their companies create, deliver or capture value in the next three years

Source: PwC’s 27th Annual Global CEO Survey

Software M&A retains its top spot

Software continues to be the largest driver of M&A within TMT. Although deal volumes remain below historical levels, the deal values announced in the software sector during the first half of 2024 are on track to surpass last year. In the first half of 2024, Synopsys’s $32.5bn proposed acquisition of Ansys was the second-largest deal announced globally—across all industry sectors. In total, there were six announced software megadeals (deals with a value of more than $5bn) in the first half of 2024, compared to four in all of 2023.

Top ten announced technology deals by deal value in H1’24*
Rank Subsector Target Deal value ($bn)
1 Software Ansys, Inc. 32.5
2 Hardware Juniper Networks, Inc. 13.6
3 Software Tronic LLC 12.2
4 Software HashiCorp, Inc. 7.7
5 Software Squarespace, Inc. 6.6
6 IT Services Vantage Data Centers 6.4
7 IT Services X.AI Corp. 6.0
8 Software Altium Limited 5.8
9 Software Darktrace PLC 5.5
10 IT Services Nuvei Corporation 5.0
Top 10 Total 101.3
Top 10 Software Contribution 70.3
Software as a % of the Top 10 69.4%

Note: Top deals announced through 31 May 2024
Source: LSEG and PwC analysis

Software’s predictable recurring revenues and cash flows continue to appeal to both strategic buyers and private equity (PE) in the current lower-growth environment. While PE’s share of total software deals has decreased by three percentage points—from 63% in the second half of 2023 to 60% in the first half of 2024—it remains in line with the 2019-2023 average. However, PE’s share of total software deal value has decreased by 39 percentage points, from 83% in the second half of 2023 to 54% in the first half of 2024, well below the past five-year average.

As cyber products are increasingly delivered as software-as-a-service (SaaS) offerings rather than on premise or IT services, cybersecurity may also help push software deal dominance. As regulators mandate stronger cybersecurity reporting and there is increasing awareness of cyber threats, this will be an interesting software deal space to watch. Cisco’s $28bn acquisition of Splunk (the biggest software deal of 2023), Thoma Bravo’s $5.3bn proposed acquisition of cybersecurity AI company Darktrace, CyberArk’s $1.5bn proposed acquisition of machine identity specialist Venafi, and aircraft manufacturer Airbus’s acquisition of cybersecurity and IT solutions provider INFODAS all illustrate the continued interest in investments in this subsector. Furthermore, Palo Alto Networks recently announced its acquisition of IBM’s SaaS offering, QRadar, which may be a harbinger of more consolidation in the space as providers attempt to offer end-to-end security operations platforms. 

“While not driving M&A just yet, artificial intelligence has attracted very significant venture and corporate investment. The combined planned capital expenditures of Google, Meta, Microsoft and Amazon in 2024 are more than $200bn—that’s equivalent to almost the entire value of M&A in the tech sector so far this year.”

Barry Jaber,Strategy&, Global Technology and Telecommunications Deals Leader, Partner, PwC UK

M&A hot spots

We expect the following areas to be M&A hot spots in the second half of 2024:

As noted above, software deal value has increased compared to 2023 levels as corporates resume dealmaking following a period of internal focus.

Telecom companies continue to make transformational changes as they prepare for the future. PwC’s 27th Annual Global CEO Survey found that 52% of telecom CEOs say that their business models will not be economically viable in ten years if their companies continue on their current paths. Looking across the telecoms sector, we see companies and investors recognising that value can be unlocked by transferring components of the integrated telco business model into a more focused, or ‘puretone’, business model. This shift toward business model reinvention is already being seen in transactions such as the Sprint and T-Mobile merger, BT Group’s spin-off of BT Sports into a joint venture with Warner Bros. Discovery and the announced sale of American Tower's India operations. These shifts are illustrated by the delayering and consolidation of assets that has been the trend in the industry over the past few years.

According to PwC’s Global Entertainment and Media Outlook 2023-2027, global advertising revenue is projected to increase from $763.7bn to $952.6bn, representing a compound annual growth rate of 4.5%. This trajectory puts advertising on a path towards becoming the first of three major entertainment and media categories to reach $1tn in annual revenue. It has become a core revenue stream for entertainment and media businesses that depend on targeted advertising to generate incremental ROI, especially as streaming services mature. And capital is already being deployed. For example, Amazon is expanding its streaming of National Football League games to include some key playoff games. This expansion of the market opens opportunities for the industry to further grow revenue channels as tech companies such as Apple and Netflix leverage their robust data collections to develop targeted advertising, demand-side platforms (DSPs) and supply- side platforms (SSPs) to reach consumer wallets. We expect deals related to advertising and its components, such as ad tech vendors and digital marketing agencies, to be a focus for M&A as entertainment companies compete for a greater share of consumer spending. 

“The continued pressure for consumers’ time and money is driving the broader entertainment and media ecosystem to focus on value. We expect joint ventures, partnerships and bundling to continue to drive customer satisfaction and value propositions to support pricing, minimise churn and drive new customers to platforms.”

Bart Spiegel,Global Entertainment and Media Deals Leader, Partner, PwC US

Key themes driving M&A activity in 2024

  • Release of pent-up demand: Several positive factors—including easing concerns about recession, stabilised inflation, large amounts of unallocated capital and valuations not reflecting the growing appetite for dealmaking—suggest that TMT M&A is primed to grow over the next six to 12 months. As noted earlier, the first half of 2024 has seen a return to larger deals, especially in the software subsector, and corporates are dominating the action. In the second half of the year, we may see PE regain some share of M&A, because of growing pressure on funds not only to deploy new capital but also to return capital to investors through the sale of existing portfolio assets. Over the past 18 to 24 months, PEs have focused on operational efficiencies. But this trend may decelerate, leading to more deal activity in the remainder of 2024 and early 2025.
  • The IPO strikes back: The IPO market may improve in 2024 due to strong performance in the equity markets. For example, the S&P 500 and MSCI indices rose nearly 25% in 2023, and has led to some recent successes in the IPO market in the first half of 2024. These gains, combined with materially higher IPO aftermarket performance, signal that the IPO market may pick up in 2024. However, the first quarter of 2024 saw a continuation of last year’s slowdown, with 291 IPOs launched, a 22% decrease over the prior quarter and a 13% year-over-year decrease. Global proceeds of $23.2bn increased by 7% quarter-over-quarter and 3% year-over-year, indicating a trend towards larger IPOs. TMT has exemplified this trend, accounting for the two largest IPOs during the first half of 2024. Reddit’s $860m offering and Astera Labs’ $820m offering may be indicative of future IPOs, although some of the bigger names may wait until 2025 because of macroeconomic pressures, regulatory scrutiny, and the impending US election.

M&A volumes and values in 2024

Technology, media and telecommunications deal volumes, 2019-H1'24

Click the tabs to view the chart and commentary for each region.

Bar chart showing M&A volumes for the technology, media and telecommunications sectors. Deal volumes in TMT increased by 5% between 2022 and 2023 although deal values declined by 55% due to a lower number of megadeals.

Sources: LSEG and PwC analysis

Deal volumes decreased by 36% during the first half of 2024 compared to the first half of 2023 but deal values increased by 54% over the same period. The sector trends for deal values varied, with media and entertainment and technology showing growth in deal values despite the volume declines.

The technology sector remained the largest sector accounting for 83% of deal volumes and 74% of deal values in the first half of 2024.

Within the technology sector, software accounted for 69% of deal volumes and 64% of deal values. During the first half of 2024, software deal volumes decreased by 42% from the first half of 2023, but deal values increased by 41% because of six megadeals. The next largest subsector, IT services, accounted for 18% of deal volumes and deal values, and saw a 23% decline in deal volumes but a 68% increase in deal values during the first half of the year because of three megadeals. The semiconductor sector also showed a decline in deal volumes of 29% but a 93% increase in deal values primarily because of one large megadeal.

M&A outlook for technology, media and telecommunications in 2024

To maintain relevance in a time of economic uncertainty, companies should prioritise resilience and speed to unlock value from transformational deals. Below are four areas of focus for dealmakers to consider.

  • Embrace complexity: Create a plan to successfully navigate intricate details and challenges involved with integration or separation to ensure a smooth transition. Present a clear and compelling story to employees, board members, investors, and the public, and address culture as part of the transformation strategy.
  • Focus on outcomes: Align deal objectives with company initiatives and strategic goals to achieve desired synergies and outcomes such as increased market share, improved operational efficiency or enhanced profitability.
  • Position for long-term growth: Identify targets that can provide sustainable competitive advantages, expand market reach, and drive value creation over time. Consider divestitures—often an underused lever for value creation—to focus management’s time and resources on the businesses that are the best strategic fit.
  • Recognise transformational opportunities: Evaluate how deals and transformational investments can help dealmakers proactively manage portfolios and plan multi-year journeys. Consider initiatives and key acquisition value drivers across go-to-market strategies, information technology, human capital, operations and supply chain, finance, accounting, tax and treasury.

Our commentary on M&A trends is based on data from industry-recognised sources and our own independent research. Specifically, deal volumes and values referenced in this publication are based on officially announced transactions, excluding rumoured and withdrawn transactions, as provided by the London Stock Exchange Group (LSEG) as of 30 June 2024 and as accessed on 3 July 2024. Certain adjustments to source data have been made to align with PwC’s industry mapping. All dollar amounts are in US dollars.

Barry Jaber is PwC’s global technology and telecommunications deals leader and a leading practitioner with Strategy&, PwC’s strategy consulting business. He is a partner with PwC UK. Bart Spiegel is PwC’s global entertainment and media deals leader. He is a partner with PwC US.

The authors would like to thank the following colleagues for their contributions: Madison Boezinger, Brian Burns, Florian Groene, Justin Ingram, Victor Myers, David Samuel, Neomi Sanghrajka and Alex Schmitt.

Explore our local M&A Trends in Technology, Media & Telecommunications from the following countries or regions:

Want to know the M&A trends we expected in Technology, Media and Telecommunications at the beginning of 2024?

Read our 2024 Outlook