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M&A market slump spreads to all regions, finds Willis Towers Watson research

For the first time since the launch of Willis Towers Watson’s Quarterly Deal Performance Monitor in 2008, all regions have underperformed at the same time in the same quarter.

Mergers and Acquisitions
Mergers and Acquisitions

By Andrew Collis and Jamie Kilduff | June 26, 2019

M&A market slump spreads to every region, sounding warning bell for future deal making in 2019, according to Willis Towers Watson research.

LONDON, Wednesday 26 June 2019 — Companies making M&A deals in every region worldwide on average lost shareholder value, underperforming the World Index1 by -6.3pp (percentage points). According to the latest results from Willis Towers Watson’s Quarterly Deal Performance Monitor (QDPM), run in partnership with Cass Business School, the global market has now underperformed for an unprecedented seven consecutive quarters.

All regions underperformed their respective indices. Asia Pacific acquirers have shown the worst performance of all regions with an underperformance of -7.9pp, followed by an underperformance of European buyers at -4.1pp and North American acquirers at -3.7pp below their regional indices. Europe now remains the only region where acquirers are still outperforming the index for both the one-year and three-year rolling periods.

“The Global M&A market peaked in 2015 and has been on the slide ever since, as more stringent regulations, protectionism and political uncertainty continue to frustrate deal making,” said Jana Mercereau, Head of Corporate Mergers and Acquisitions for Great Britain. “M&A activity is a barometer of business confidence and the rapid drop in deal volume in the last six months, especially in the US market, suggests the impact of geopolitical, trade and tariff uncertainties has been brutal, fuelling board room uncertainty around the world. Until there is less turbulence in the global markets, there is a good chance that even fewer deals will be announced in the second half of 2019.”

Based on share price performance, additional findings revealed by the study include:

  • Deal volumes at the lowest level since Q2 2009 for any second quarter, with 144 deals completed so far in Q2 20192. This is attributed to a flat volume of deals in North America (lowest since Q2 2009), Europe, and Asia-Pacific (lowest since Q2 2013).
  • For the first time in five years, there were no completed mega deals in Q2 2019 (those valued at over $10bn).
  • Most deal types underperformed the index. The biggest underperformance for the quarter is Slow deals, currently at -11.1pp. Both Intra-Regional deals and Domestic deals are currently at –8.7pp and -9.9pp.
  • In a reversal trend, Cross-regional, Large, Cross-border and Quick deals have outperformed the index by +6.3pp, +6.3pp, +5.7pp and +4.9pp respectively.
  • The three-year rolling average performance is currently at -0.7pp, while the performance since the launch of the Index in 2008 remains positive at +2.6pp.

In line with the negative performance of European acquirers, UK deal makers also underperformed in Q2 2019. Over a three-year rolling period, however, UK deal makers outperformed the market by +3.7pp, despite the Brexit turmoil. Foreign companies also continue to take advantage of the devaluation of sterling to buy British firms, outperforming the Index by +2.7pp during the same period.

“Corporate clarity will continue to be a key theme driving M&A activity, as pressure increases on companies to review their business structures and assess how best to unlock value from deals,” said Jana Mercereau. “Digital disruption will also be a major factor shaping the market, as large companies attempt to assimilate technology to become more efficient and better reach end users by buying boutique firms, resulting in fewer billion dollar megadeals.”

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.
2. The QDPM research for Q2 2019 includes deals completed between 1st April 2019 and 14th June 2019. We anticipate the current number of deals of 144 to increase by quarter end.

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