Q1 2024 – Global M&A endures headwinds with pick up in first quarter deal closures

Global mergers and acquisitions (M&A) achieved a modest rise in completed deals in the first quarter of 2024 compared to the same period last year, according to research from WTW’s Quarterly Deal Performance Monitor (QDPM).

Run in partnership with the M&A Research Centre at Bayes Business School, City, University of London, the data reveals 166 deals valued over $100 million were completed globally during the first quarter of 2024. This compares to 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 stabilising. 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 Q4 2023 and 32 during the previous quarter. Also, five mega deals (valued over $10 billion) closed in the first quarter of 2024 compared to just one in the first three months of 2023.

Compared to strong equity market performance world-wide, however, companies completing M&A deals underperformed the wider market^[1] by -13.1pp (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 (-13.6pp).

Despite these latest performance figures, the long-term 15+ year trend still shows M&A deals to have outperformed the market since the global financial crisis (+1.5pp).

Jana Mercereau, Head of Corporate M&A Consulting, Great Britain at WTW, said: “In 2023, the global M&A market weathered an incredibly difficult year for acquisitions. While inflation fears have been receding, ongoing challenges such as weak global economic growth, geopolitical instability and uncertainty surrounding the U.S. presidential election will continue to impact dealmaking.

“At the same time, recession fears are fading, shifting consensus toward a soft landing, and predictions for a rebound in M&A completions are backed by the recent sharp rise in IPO activity. With trillions of dollars of dry powder, private equity firms are also under increasing pressure to get off the sidelines and deploy their committed capital. The uptick in completed deal activity in early 2024 certainly suggests a busier year ahead.”

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 (-14.1pp) 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 -9.2pp, with 37 deals completed.

Footnote

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. Return to article