Group of multiracial people working in modern coworking space

Dealmaking amid uncertain monetary cycles: Lessons from history

The key to proactive dealmaking lies in past trends and in innovative approaches to navigate future shifts.

In brief
  • M&A trends during past monetary policy easing periods provide valuable insights for strategic dealmaking. 
  • A proactive M&A strategy can yield high total shareholder returns.
  • Early divestitures can free capital, allowing strategic investment reshuffles.

Given signals from the Federal Reserve regarding potential rate cuts in 2024 and 2025, corporate bond yields are starting to ease, making financing less expensive. Although these prospective cuts are distinct from those of 2000-2002 and 2007-2009 due to the altered macro-economic landscape, lessons from these past eras remain relevant (see figure 1).

Instead of expecting drastic drops to nearly zero percent, we can look forward to a few modest rate adjustments. If proactive and strategic in their response, companies hold the potential to unlock high shareholder returns and free up capital for strategic investments, despite uncertainties.

M&A analysis of past economic cycles

Interest rate easing environment one pager

Proactive buyers outperform others because of the first-mover advantage. Proactive buyers can be selective of available targets, choose businesses that offer the best strategic fit, invest ahead of time and lay the groundwork to realize synergies (e.g., expansion into new adjacent businesses, markets, technologies, products) as the economic environment eases. Additionally, the programmatic/serial acquirers outperform selective and non-buyers since they are good at strategically using M&A to further their enterprise strategy and have proven integration blueprints.


Proactive sellers who divest early outperform reactive sellers and late movers. By divesting non-strategic businesses/assets early, proactive sellers create opportunities to free up capital, re-prioritize focus areas and invest in high-growth segments. They are also better positioned and prepared to benefit from capital reallocation prior to easing conditions. Importantly, past proactive buying and selling behaviors, even though occurring under different circumstances, reveal insightful trend patterns to guide future economic responses. When adopting a proactive and aggressive approach to dealmaking, significant preparatory work is needed to be successful.

Buyers’ preparatory work should focus on:

Sellers’ preparatory work should focus on:


In anticipation of potential, though moderate, Fed funds rate cuts, companies can adopt proactive deal strategies to navigate the changing landscape successfully. Although the past easing periods in 2000-2002 and 2007-2009 followed different dynamics, both periods offer lessons to transaction leaders on making informed decisions about acquisitions and divestitures. Harnessing these insights can help companies seize valuable opportunities and progress strategically amid the economic shifts we face today.


The key to unlocking strategic M&A and divestment opportunities lies in adapting lessons from the past and taking proactive steps.

Related articles

How CEOs juggle transformation priorities – the art of taking back control

EY CEO survey highlights how CEOs consider AI transformation, ESG and M&A to navigate between immediate profits and future sustainability aspirations. Read more.

How divestitures can fire up growth with a focus on commercial strategy

CEOs and their teams can prioritize commercial strategy when planning a carve-out or other separation to help ignite future growth. Read more.

Strategies for successful corporate separations

Gain competitive advantage with valuable insights from 160+ corporate separations, including spin offs, carve outs, optimal timing, and value maximization.