Global M&A poised for growth as storm clouds recede
10 Janeiro 2024 - 11:00AM
Global mergers and acquisitions (M&A) activity lost steam in
the final three months of 2023, with buyers struggling to add
value, according to new research on completed deals from leading
global advisory, broking and solutions company WTW’s Quarterly Deal
Performance Monitor (QDPM).
Based on share price performance, companies
completing M&A deals in the fourth quarter of 2023
underperformed the wider market by –13.6 percentage points for
acquisitions valued over $100 million between October and December
2023.1 This result is an all-time low for any quarter since 2008
(when this study began) and follows a negative performance of –8.7
percentage points in the previous quarter.
Run in partnership with the M&A Research
Centre at Bayes Business School, the full-year figures for 2023
reveal an underperformance by buyers of –7.2 percentage points
compared with non-acquirers. This compares with the marginally
negative full-year performance of –0.8 percentage points recorded
in 2022. Despite these latest results, the long-term 15-plus-year
trend shows deals have outperformed the market since the global
financial crisis of 2007 – 2009 (+1.5 percentage points).
Global deal volume was down by 27%, with 619
transactions completed in 2023 compared with 853 in 2022, driven by
persistent inflation, rising interest rates and geopolitical
instability. Large deals (valued over $1 billion) were down by 30%
in 2023, continuing a steady decline that began in 2020,
with 145 completed compared with 208 in 2022. Eleven mega deals
(valued over $10 billion) closed in 2023 compared with 15 in 2022.
These numbers potentially indicate a new baseline and return to
pre-pandemic levels.
“It has been a tough 12 months. M&A deals
have been weighed down by geopolitical conflict, recession fears,
rising interest rates and the high cost of capital,” said David
Dean, managing director, Mergers and Acquisitions, WTW. “Potential
for disruption in 2024 remains considerable, exacerbated by a
packed election calendar and a complex regulatory landscape raising
more hurdles, scrutiny and longer timetables to complete deals.
“Despite these headwinds, inflation and the cost
of financing seem to be stabilizing, and the record level of dry
powder waiting to be deployed suggests a rebound of activity in
2024. With transactions facing greater scrutiny, however,
successful bids will depend more than ever on exercising a high
degree of caution, a focus on ‘best-fit’ deals and thorough due
diligence.”
Global M&A deals — annual
performance
|
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
2022 |
2023 |
Average annual performance (percentage
point)* |
+4.5 |
+5.5 |
+10.1 |
+5.4 |
–1.3 |
–3.0 |
–5.0 |
–1.9 |
+1.4 |
–0.8 |
–7.2 |
*The figures in the table show the annual median-adjusted
performance of all acquirers.
North America acquirers closed 317 deals in
2023, 21% fewer compared with the 402 deals completed in 2022.
European dealmakers also underperformed their regional index and
showed a negative performance of –7.6 percentage
points, with 117 deals in 2023. Deal volumes are down compared with
the 203 deals in 2022.
Asia Pacific was the only region to outperform
its regional index (+6.4 percentage points), with 155 deals
completed in 2023. As with other regions, however, Asia Pacific
volumes were down 23% compared with last year (200 deals in
2022).
Dean noted, “Macroeconomic volatility
and geopolitical conflict will ensure conditions continue to
test dealmakers over the next 12 months, driving the current trend
of targeting smaller mid-market transactions that are easier to
execute, are less risky to finance, and offer a unique and
strategic fit within an acquirer’s portfolio.
“We also expect joint ventures, strategic
alliances and minority investments to gather pace in 2024 as
companies respond to market disruption by sharing and mitigating
risk in pursuit of strategic deals, with a renewed focus on
technology not only as a source of growth but also to unlock
greater value from M&A.”
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
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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