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Press Release

M&A performance in North America and Europe keeps pace with record rate, as slide in China market activity resists recovery

July 7, 2021

Mergers and Acquisitions
  • For the first time in four years, dealmaking performance beats non-acquirers for second consecutive quarter
  • Buyers outclass wider market1 by +2.1pp (percentage points) for deals valued over $100 million in Q2 2021
  • U.S. deal volume up 244% in Q2 2021 compared to Q2 2020 and up 58% since Q1 2021
  • Europe dealmaking in Q2 2021 up 40%, but Asia Pacific market sees sharp slow down

LONDON, July 7, 2021 — Global merger and acquisition (M&A) activity set new records in the second quarter, eclipsing previous highs reached in the first three months of the year and putting 2021 on track to be the most active year ever. The unprecedented surge in dealmaking follows a robust rebound in economic confidence, as companies race to remake themselves in the face of a post-COVID world and sweeping technological change.

Based on share price performance, buyers outclassed the wider market by +2.1pp for deals valued over $100 million in the second quarter of 2021. According to Willis Towers Watson’s Quarterly Deal Performance Monitor (QDPM), this is the first time since 2017 that acquirers have managed to outperform for two consecutive quarters. For the one year rolling period, acquirers bettered the M&A index by +3.2pp on the back of a very strong first quarter.

Jana Mercereau, Head of Corporate M&A Consulting, at Willis Towers Watson, said: “This is one of the busiest times we’ve ever seen, with the M&A market in full-rebound mode across nearly every sector, propelled by cash-rich corporates under pressure to reorganise in response to COVID.

“Concerns persist that inflation could spike later this year, triggering a hike in interest rates and an end to a record M&A boom. However, such fears seem premature with the current frenzy of activity fuelled by market dynamics likely to sustain or even accelerate deal flow in the second half of 2021, namely ongoing pressure to deploy capital, acquire technological capabilities and respond to rising shareholder activism.”

Run in partnership with the M&A Research Centre at The Business School (formerly Cass), the data show that the surge in deals and improved performance, which started toward the end of 2020 after plummeting in the early days of the pandemic, remains largely due to activity in North America and Europe.

For the third consecutive quarter, with SPACS continuing to play a large part, North American acquirers outperformed their regional index (+1.6pp), as volumes increased sharply by 58% since the previous quarter and by 244% compared to Q2 2020 (52 to 179 deals), resulting in the region’s highest ever figures for any quarter since 2008.

Buyers from Europe continued their strong form by outperforming their regional index by +6.4pp with a burst of activity in Q2 2021 and 59 deals completed. This too was an all-time high for a second quarter. Meanwhile, Britain clearly remains an attractive M&A destination for non-UK acquirers who, undeterred by Brexit and a strong FTSE 100 performance, continue to demonstrate interest in buying UK companies. UK-based dealmakers also consistently outperformed their regional Index over the last 12 months (+11.4pp).

In contrast, Asia-Pacific acquirers underperformed their regional index by -0.7pp with only 32 deals closing in Q2 2021, the lowest since 2014. China also completed the smallest number of deals since 2013, as Chinese acquisition volumes continue to fade from a peak in 2015.

M&A activity has clearly continued the momentum gained following an explosive first three months of 2021 as acquisition-hungry buyers completed more deals than any second quarter on record (278 deals), according to these latest results from the Willis Towers Watson index. This is a significant upswing, even when compared to the brisk pace set in the first quarter of 2021 (206 deals).

The data reveals that the first half of the year has also been a record-breaking period with 484 deals completed, 58% higher than the same period in 2020 (307 deals), when the global economy came to a halt because of the pandemic. This is the highest ever figure recorded for the January to June period since Willis Towers Watson launched its M&A index in 2008.

Companies are pressing the reset button in response to the pandemic, restructuring to build resilience, reduce costs and reposition for future growth.”

Jana Mercereau,
Head of Corporate M&A Consulting, Great Britain at Willis Towers Watson

Mercereau said: “Companies are pressing the reset button in response to the pandemic, restructuring to build resilience, reduce costs and reposition for future growth, effectively accelerating pre-existing trends such as digital transformation and changes in consumer behaviour. Robust sell-side activity driven by companies continuing to divest non-core assets points to a strong M&A outlook for the remainder of 2021.

“Post-COVID, attention will return to the growing wave of decarbonisation, perhaps the greatest global disrupter in the years and decades to come. As more companies commit to wholesale transformation of business and operating models to meet aggressive net-zero goals, M&A looks certain to play a pivotal part in this low carbon transition. In a process that will create winners and losers, quality due diligence and improved integration will become increasingly important for successful, profitable and equitable deals.”

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.

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