Skip to main content
Press Release

Europe props up struggling global M&A market

Mergers and Acquisitions|Insurance Consulting and Technology|Talent
Mergers and Acquisitions

April 2, 2019

Europe is the only region worldwide to have recorded a positive M&A performance in the first quarter of 2019, according to Willis Towers Watson

LONDON, Tuesday 2 April, 2019 — Europe is the only region worldwide to have recorded a positive M&A performance in the first quarter of 2019, with European dealmakers outperforming their regional index by +2.8pp (percentage points), according to the latest results from Willis Towers Watson’s Quarterly Deal Performance Monitor (QDPM), run in partnership with Cass Business School.

A three-year rolling average performance of +5.1pp above their index puts European acquirers in the top spot, driven by consistent outperformance in the previous six quarters, followed by North American and Asia Pacific acquirers which have underperformed their regional indices over the same period by -1.1ppand -5.5pp respectively.

UK M&A performance also remains in line with the positive performance of European buyers, with the five deals over $100m that took place performing on average +5.7pp above the index. UK acquirers have consistently outperformed their region since the launch of the Index in 2008 (+3.9pp), in the last three years (+3.7pp) and in the last year (+3.9pp), despite the continued uncertainty of Brexit.

Confronted by a volatile dealmaking environment impacted by global political uncertainty, from trade wars to ging protectionism, the global M&A market as a whole underperformed for an unprecedented sixth consecutive quarter, on average underperforming the Index by -5.4pp in the last three months. This performance also represents a significant decline compared to the same period in 2018 (-0.6pp).

Jana Mercereau, Head of Corporate Mergers and Acquisitions for Great Britain, said: “European and UK players continue to lead the way in deal performance. Yet tough conditions made more acute by the U.S./China trade disputes, the prospect of rising interest rates and tightening boring conditions, inevitably risk further dampening the M&A market and are likely to force buyers worldwide to be more selective than ever.”

Acquirers in North America showed an especially sharp decline of -10.1pp, which is the region’s worst performance since the Index launched, while acquirers from Asia-Pacific underperformed their regional index by -5.0pp.

“The poor results from the North American M&A market, traditionally shown to be very robust, reflect an increasing focus on targeting domestic acquisitions - fuelled partly by the US tax reform law changes. Experience is showing that this has so far proved unprofitable and dealmakers should instead be looking for the best deals, rather than limiting themselves to targets that take advantage of current domestic policy,” said Jana Mercereau.

Additional findings revealed by the study include:

  • The three-year rolling average performance is currently at -0.9pp, which is the first time this average has been negative since the launch of the Index in 2008.
  • Most deal types underperformed. The biggest underperformance for the quarter is Slow deals currently at -10.0pp. Both Large and Domestic deals are currently at -9.1pp.
  • Cross-border, Cross-regional and Quick deals outperformed the index by +0.9pp, +3.1pp and +2.5pp respectively.
  • The first quarter saw just 180 deals closed, which is the lowest quarter figure since Q1 2014. This is principally due to the continued decline in the number of Asian deals.

“Ging cash reserves, technology disruption, the slowdown in the growth of emerging markets will continue to drive companies to get into the M&A market,” said Jana Mercereau. “At the same time, the market stress that characterised last year remains and many targets are now looking more expensive than they did during previous M&A peaks, such as in 1999 and 2008, making it as challenging as ever to deliver deals successfully.

“For dealmakers hoping to turn a corner later this year, there has never been a more important time for decision makers to focus on target selection, due diligence, integration and the people who will be instrumental to execution before jumping into a deal.”

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 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.

Contact Us