Competition for assets is widespread and robust
An active deal market signals intense competition, with 77% of TMT executives expecting to see increasing competition for assets in the next 12 months. This competition is expected to be powered by private capital (57% versus 47% for corporate buyers).
TMT executives are also expecting competition from other sectors, driven by the strategic need to accelerate investment in technology and digitalization, with 80% expecting an increase in cross-sector M&A. Further, 73% expect an increase in cross-border dealmaking, suggesting competitive threats from further afield.
Digital strategy high on the agenda
TMT respondents are feeling the impact digital is having on their industry. They are investing in technology to improve the customer experience, create new services or products, and reduce risk. Artificial intelligence (AI) and machine learning is seen as the technology that will have the most impact on their businesses in the next two years by 32% of respondents, compared with 13% for 5G and 18% for analytics.
Sixty-two percent of TMT respondents are dedicating 25% to 49% of their total investment capital on technology. The majority of the investment is focused on in-house development and R&D (24%), followed by direct acquisitions (21%) and JVs or alliances (19%).