Skip to main content
main content, press tab to continue
Press Release

COVID-19 drags North America M&A deals to lowest level in over a decade as Europe and APAC escape worst

July 6, 2020

During the first half of 2020, North America M&A performance and volume lag behind rest of world.
Mergers and Acquisitions
Mergers and Acquisitions

LONDON, 6 July, 2020 — The impact of the COVID-19 pandemic on deal making in the first six months of 2020 was significant but not unexpected, yet regional differences in deal performance and volume revealed by M&A data1 from Willis Towers Watson have been more dramatic.

Based on share price performance, the latest results from Willis Towers Watson’s Quarterly Deal Performance Monitor (QDPM), run in partnership with Cass Business School, show North America experienced the sharpest fall in M&A performance by some margin. Acquirers underperformed their regional index by -7.2pp (percentage points) – with just 137 deals completed in H1 2020 (compared to 188 in H1 2019). This is the lowest number of North American deals for a six-month period since 2009.

In contrast, European buyers performed +10.2pp above their regional index in H1 based on an actual increase in deals completed (80 deals compared to 68 deals in H1 2019). This is also the first time in two years that Europe has recorded three consecutive quarters of positive performance. Meanwhile, UK acquirers performed +16.9pp above the index with 15 deals in the first half of this year.

Economic uncertainty caused by the pandemic seems to have had a far greater negative impact on the ability of US companies to initiate and successfully complete M&A negotiations.”

Jana Mercereau,
Head of Corporate Mergers and Acquisitions for Great Britain

Asia-Pacific dealmakers also fared better compared to their regional index in the first half of 2020, albeit with a more modest positive performance of +3.1pp and based on a slight dip in volume (82 deals compared to 95 completed in H1 2019). Perhaps more significantly, the region’s outperformance in the last three months improved substantially at +8.0pp based on 41 deals closed - the region’s first significant positive quarterly performance since late 2016.

Jana Mercereau, Head of Corporate Mergers and Acquisitions for Great Britain, said: “Global M&A activity tumbled to its lowest level in more than a decade in the wake of the COVID-19 outbreak, with most of this decline driven by North America. Economic uncertainty caused by the pandemic seems to have had a far greater negative impact on the ability of US companies to initiate and successfully complete M&A negotiations.”

Additional findings from the QDPM data include:

  • Deals taking longer – The average time to close a deal in the first six months of 2020 has increased by 8% compared to the same period in 2019 (from 144 days to 156). This trend is likely to endure, expects Willis Towers Watson, with M&A deals continuing to be delayed or cancelled as companies try to wait out the worst of the downturn.
  • Mega deals still in play – Six mega deals (valued at $10bn+) closed in H1 2020 compared to five deals in H1 2019.
  • Industry winners – Acquirers in the Energy and Power (+8.2pp), Healthcare (+3.4pp) and Materials (+9.8pp) sectors all outperformed their respective indices in H1 2020.
  • Industry losers – High Technology (-15.4pp) acquirers have been hit hardest during the COVID-19 outbreak.
  • Domestic vs international – Cross-border and cross-regional deals both outperformed their indices in H1 2020 by +0.3pp and +6.2pp respectively, while domestic deals struggled with an underperformance of -2.6pp.

“Before the severe disruption of COVID-19, dealmakers already faced uncertainty, including trade disputes, the threat of global recession, the rise of shareholder activism and a US presidential election on the horizon, making the deal performance and volume in some markets even more impressive,” said Jana Mercereau. “While it is not possible to forecast the pandemic’s long-term impact on M&A, more turbulence seems inevitable.

“What previous crises do tell us is that there will be opportunities to make deals, underpinned by vast amounts of capital still waiting to be deployed. Activity, partly driven by distressed M&A and non-core divestitures at bargain prices, will become more selective, deals will take longer and acquirers will need to be prepared for the duration and depth of their due diligence to increase, even as COVID-19 subsides.”

Willis Towers Watson 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 which meet the study criteria are included in this research.
  • Deal data sourced from Refinitiv.

About Willis Towers Watson M&A

Willis Towers Watson’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 Willis Towers Watson

Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving in more than 140 countries and markets. We design and deliver solutions that manage risk, optimise benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential.


1 The M&A research tracks the number of completed deals over $100m and the share price performance of the acquiring company against the MSCI World Index, which is used as default, unless stated otherwise.

Contact us