Tuesday, 23 April 2024

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Global M&A endures headwinds with pickup in first-quarter deal closures By Investing.com

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NEW YORK, April 03, 2024 (GLOBE NEWSWIRE) — Global mergers and acquisitions (M&A) achieved a modest rise in completed deals in the first quarter of 2024 compared with the same period last year, according to research from leading global advisory, broking and solutions company WTW’s (NASDAQ: WTW) Quarterly Deal Performance Monitor (QDPM).

Run in partnership with the M&A Research Centre at Bayes Business School, part of City, University of London, the data reveal that 166 deals valued over $100 million were completed globally during the first quarter of 2024. This compares with 150 deals completed during the same period in 2023, representing an 11% increase in volume.

Following four consecutive quarters of decline, the volume of large deals (valued over $1 billion) may also be stabilizing. With 34 large deals completed in the first quarter of 2024, this represents the second quarterly rise in a row, following 33 deals completed in the fourth quarter of 2023 and 32 during the previous quarter. Also, five mega deals (valued over $10 billion) closed in the first quarter of 2024 compared with just one in the first three months of 2023.

Compared with strong equity market performance worldwide, however, companies completing M&A deals underperformed the wider market1 by “13.1 percentage points for acquisitions valued over $100 million between January and March 2024. This figure is based on share price performance and continues the negative performance of the previous quarter (“13.6 percentage points).

Despite these latest performance figures, the long-term 15-plus-year trend still shows M&A deals to have outperformed the market since the global financial crisis (+1.5 percentage points).

2023 proved to be a very challenging year for acquisitions globally, said David Dean, managing director, Mergers & Acquisitions, WTW. And despite receding inflation fears, several factors are combining to have a chilling effect on dealmaking, including weak global economic growth, geopolitical instability and ongoing uncertainty surrounding the U.S. presidential election.

However, there may be some light at the end of the tunnel, continues Dean. Worries over a possible recession are dimming, and there are predictions for a turnaround in M&A completions, which are supported by a recent jump in IPO activity. Additionally, private equity firms are facing heightened pressure to step up their M&A activity and utilize their committed capital. In fact, we may very well see a more…

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