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
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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
“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
“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.
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&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.
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1 The M&A research tracks the number of completed deals over
Source:
2024 GlobeNewswire, Inc., source