Global M&A endures headwinds with pickup in first-quarter deal closures
03 Aprile 2024 - 4:02PM
Global mergers and acquisitions (M&A) achieved a modest rise in
completed deals in the first quarter of 2024 compared with the same
period last year, according to research from leading global
advisory, broking and solutions company WTW’s (NASDAQ: WTW)
Quarterly Deal Performance Monitor (QDPM).
Run in partnership with the M&A Research
Centre at Bayes Business School, part of City, University of
London, the data reveal that 166 deals valued over $100 million
were completed globally during the first quarter of 2024. This
compares with 150 deals completed during the same period in 2023,
representing an 11% increase in volume.
Following four consecutive quarters of decline,
the volume of large deals (valued over $1 billion) may also be
stabilizing. With 34 large deals completed in the first quarter of
2024, this represents the second quarterly rise in a row, following
33 deals completed in the fourth quarter of 2023 and 32 during the
previous quarter. Also, five mega deals (valued over $10 billion)
closed in the first quarter of 2024 compared with just one in the
first three months of 2023.
Compared with strong equity market performance
worldwide, however, companies completing M&A deals
underperformed the wider market1 by –13.1 percentage points for
acquisitions valued over $100 million between January and March
2024. This figure is based on share price performance and continues
the negative performance of the previous quarter (–13.6 percentage
points).
Despite these latest performance figures, the
long-term 15-plus-year trend still shows M&A deals to have
outperformed the market since the global financial crisis (+1.5
percentage points).
“2023 proved to be a very challenging year for
acquisitions globally,” said David Dean, managing director, Mergers
& Acquisitions, WTW. “And despite receding inflation fears,
several factors are combining to have a chilling effect on
dealmaking, including weak global economic growth, geopolitical
instability and ongoing uncertainty surrounding the U.S.
presidential election.
“However, there may be some light at the end of
the tunnel,” continues Dean. “Worries over a possible recession are
dimming, and there are predictions for a turnaround in M&A
completions, which are supported by a recent jump in IPO activity.
Additionally, private equity firms are facing heightened pressure
to step up their M&A activity and utilize their committed
capital. In fact, we may very well see a more active year ahead
given the apparent uptick in deal announcements in late 2023 and
early 2024.”
The M&A market in North America experienced
a challenging first three months of the year, with acquirers
underperforming their regional index for the fifth consecutive
quarter, following 97 completed deals. The level of
underperformance (–14.1 percentage points) was the region’s third
worst ever since the WTW study began in 2008.
European dealmakers also struggled to generate
value from transactions. Having not outperformed their regional
index since 2021, they underperformed during the period January to
March 2024 by –9.2 percentage points, with 37 deals completed.
M&A performance was more robust in the Asia
Pacific region, where more positive results have been achieved
during the past two years, leading acquirers to record a
first-quarter performance of +3.0 percentage points, with 31 deals
completed. Notably, deals over $100 million completed in China —
the world’s second largest economy — slumped to just nine during
the first three months of 2024, the country’s lowest level in over
a decade and a fall of over 90% since Chinese corporate M&A
deals peaked in 2015.
“It’s too soon to say whether there will be a full market
recovery, but conditions for M&A activity are improving.
Interest rates have stabilized and may decline at some point this
year, and there is less competition for deals. As a result, last
year’s wait-and-see attitude to dealmaking may soon be in the
rearview mirror,” said Dean.
WTW QDPM methodology
- All analysis is conducted from the
perspective of the acquirer.
- Share-price performance within the
quarterly study is measured as a percentage change in share price
from six months prior to the announcement date to the end of the
quarter.
- All deals where the acquirer owned
less than 50% of the shares of the target after the acquisition
were removed; hence, no minority purchases have been considered.
All deals where the acquirer held more than 50% of target shares
prior to the acquisition have been removed; hence, no remaining
purchases have been considered.
- Only completed M&A deals with a
value of at least $100 million that meet the study criteria are
included in this research.
- Deal data are sourced from
Refinitiv.
About WTW M&AWTW’s M&A
practice combines our expertise in risk and human capital to offer
a full range of M&A services and solutions covering all stages
of the M&A process. We have particular expertise in the areas
of planning, due diligence, risk transfer and post-transaction
integration, areas that define the success of any
transaction.
About WTWAt WTW (NASDAQ: WTW),
we provide data-driven, insight-led solutions in the areas of
people, risk and capital. Leveraging the global view and local
expertise of our colleagues serving 140 countries and markets, we
help organizations sharpen their strategy, enhance organizational
resilience, motivate their workforce and maximize performance.
Working shoulder to shoulder with our clients,
we uncover opportunities for sustainable success—and provide
perspective that moves you. Learn more at wtwco.com.
Media Contacts
Ileana Feoli: +1 212 309
5504ileana.feoli@wtwco.com
Ed Emerman: +1 609 240
2766eemerman@eaglepr.com
1 The M&A research tracks the number of
completed deals over $100 million and the share price performance
of the acquiring company against the MSCI World Index, which is
used as default, unless stated otherwise.
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