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Press Release

Large M&A deals stage comeback as market confidence returns

October 08, 2024

Mergers and Acquisitions
N/A

LONDON, October 8, 2024 — Large deals have been at the forefront of M&A activity in 2024, according to research on completed deals from WTW’s Quarterly Deal Performance Monitor (QDPM), reflecting a growing confidence among dealmakers despite geopolitical and macroeconomic headwinds.

The volume of deals valued at over US$1 billion has continued to rise steadily, reaching its highest level in two years with a healthy stream of 46 transactions completed in the last three months. This represents a 31% increase in volume compared to 12 months ago. Megadeals have also bounced back, with 13 deals valued at over $10 billion completed worldwide for the year so far, compared to six transactions during the same period in 2023.

In contrast, the number of all deals valued at over $100 million has seen a gradual decline from 188 deals closed in the final three months of 2023 to 157 in the third quarter of 2024[1], according to the data which is run in partnership with the M&A Research Centre at Bayes Business School.

A string of blockbuster deals completed this year signal a growing confidence in corporate boardrooms.”

Jana Mercereau | Head of Europe M&A Consulting at WTW

Jana Mercereau, Head of Europe M&A Consulting, WTW, said: “A string of blockbuster deals completed this year signal a growing confidence in corporate boardrooms. While uncertainty remains, particularly with an upcoming US election, renewed optimism, the expectation of more interest rate cuts and improving valuations are positive signs for businesses and investors looking to cut a deal in the months ahead.”

Acquisitions completed within the same industry sector (intra-sector deals) have also been rising as a proportion of overall M&A, compared to cross-sector acquisitions. Since the start of 2023 intra-sector deals increased from 57% of the total in Q1 2023 to 75% in the latest quarter. This indicates a trend for corporates looking to take advantage of depressed or distressed circumstances to consolidate their own markets.

Despite an upswing in the number of large deals this year, companies completing M&A deals have generally struggled to compete with the wider market based on share price return, underperforming by -9.0pp (percentage points) during the third quarter of 2024.

Europe is the only region to buck this negative trend after bouncing back in the last three months. Dealmakers recorded the region’s first positive quarter since 2021 with an outperformance of +2.1pp. Furthermore, deal numbers were up in Europe, from 38 completions in the last three months, compared to 32 deals in the same period last year. Reflecting the wider European trend, UK buyers have now outperformed the index for two consecutive quarters.

In contrast, the M&A market in North America continues to experience tough trading conditions. Acquirers underperformed their regional index by -10.1%, making it the seventh consecutive quarter that buyers have been outclassed by industry peers. Although 81 completed deals in the third quarter does represent a marginal upturn in volume compared to the same period in 2023 (77 deals).

For the first time this year, buyers in the Asia Pacific region were also unable to deliver an overall positive M&A performance, with dealmakers underperforming their regional index by -3.1pp, with 30 deals completed between July and September this year. With just four transactions closed in the last three months, deal activity in China remains 96% below its peak in 2015 and at its lowest level since 2011.

Mercereau said: “While the impact of stabilising interest rates on market confidence shouldn’t be underplayed, dealmakers remain challenged on multiple fronts as they continue to navigate significant geopolitical and economic uncertainty. If CEOs are to be more successful at unlocking long-term value from M&A, especially larger and more complex deals that face increased antitrust scrutiny, thorough due diligence combined with a plan for successful integration will prove critical in a resurgent market.”

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

About WTW M&A

WTW’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 WTW

At 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 organisations sharpen their strategy, enhance organisational resilience, motivate their workforce and maximise performance.

Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you.

Footnote

  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. Return to article
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