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Press Release

No sign of recovery as global M&A market endures second worst performance on record

Mergers and Acquisitions
Mergers and Acquisitions

October 2, 2019

Based on share-price performance, acquirers have failed to add value for eight consecutive quarters.

ARLINGTON, VA, October 2, 2019 — The global M&A market recorded its second–worst performance since the 2008 launch of Willis Towers Watson’s Quarterly Deal Performance Monitor (QDPM), run in partnership with Cass Business School. Based on share price performance, acquirers have failed to add value for eight consecutive quarters, underperforming the Global Index1 by –6.4 percentage points (pp) in the last three months, and –4.6 pp over the past year for deals valued over $100 million.

North American companies struggled to unlock value from their deals for an eighth consecutive quarter, recording the worst performance of all regions with an underperformance of –6.9 pp. European acquirers ended a run of nine consecutive quarters of positive results by underperforming their regional index by –6.7 pp. Asia Pacific is the only region to have recorded a positive M&A performance, with its dealmakers surpassing their local index by +0.8 pp, ending a run of 10 consecutive negative quarters.

The past 10 years have been relatively good times for dealmakers. But now trade wars, Brexit, weakness in China’s economy and forecasts for slower growth are weighing down sentiment in capital markets, indicating more difficult times ahead.”

Duncan Smithson
Senior director, Mergers and Acquisitions, Willis Towers Watson

The annual number of deals is expected to fall for the fourth consecutive year, although deal volume was marginally on the rise in Q3 2019 compared to the previous quarter, due to an increase in North America and Asia Pacific transactions. Fifty–nine percent of the 333 deals completed year to date have failed to add value.

“As deal volume continues its annual downward trend, tough conditions and intensifying competition for an ever–shrinking pool of targets further ramp up the stakes for CEOs under pressure from increasingly vocal shareholders,” said Duncan Smithson, senior director, Mergers and Acquisitions, Willis Towers Watson. “Despite this environment, our research shows two of five deals have successfully navigated market volatility, decreasing valuations, and macroeconomic and political uncertainty to outperform the benchmark.”

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

  • Large deals (valued at over $1 billion) had their lowest quarterly volume since 2009 and are on course to have the lowest annual volume since 2013.
  • Seven mega deals (value at over $10 billion) closed in Q3 2019, compared to none in the last quarter and five in Q1 2019, although performance on average was weak.
  • M&A transactions are taking longer to close, with deals completed in the first nine months of 2019 taking on average 140 days to execute compared with 119 days for the same period in 2018.

“The past 10 years have been relatively good times for dealmakers. But now trade wars, Brexit, weakness in China’s economy and forecasts for slower growth are weighing down sentiment in capital markets, indicating more difficult times ahead,” said Smithson.

“The instinct for dealmakers during the next downturn may be to retreat to the sidelines, with deals often taking longer to close and being more complex. Our experience instead suggests a weak economy should be seen as an opportunity — as well-executed deals rooted in a clear–cut strategic rationale, thorough due diligence and sound financial considerations, create value in both good and challenging economic conditions.”

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

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, optimize 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. Learn more at willistowerswatson.com.


1 MSCI World Index is used as default, unless stated otherwise.

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