Large deals have led global M&A activity in 2024, showing increasing confidence among dealmakers despite geopolitical and economic challenges, according to WTW’s Quarterly Deal Performance Monitor (QDPM).
The volume of M&A deals over $1 bn reached its highest point in two years, with 46 transactions completed in the last three months.
This marks a 31% increase compared to the same period in 2023. Notably, 13 megadeals valued at over $10 bn have been completed worldwide this year, up from six in the same period of 2023.
Key Findings:
- Europe Outperforms: Europe was the only region to deliver positive results, with dealmakers outperforming by +2.1 percentage points and deal volume rising to 38, up from 32 in Q3 2023.
- North America Faces Challenges: Acquirers in North America underperformed their regional index by -10.1%, marking seven consecutive quarters of underperformance. Deal volume dropped to 81 in Q3 2024 from last year’s figures.
- Asia Pacific Underperforms: Buyers in the Asia Pacific region underperformed by -3.1 percentage points, with 30 deals completed in Q3 2024, marking a challenging year for the region.
- Geopolitical and Economic Uncertainty Remains: Despite stabilizing interest rates, dealmakers continue to navigate significant geopolitical and economic challenges.
In contrast, the number of all deals valued at over $100 mn has seen a gradual decline from 188 deals closed in the final three months of 2023 to 157 in the third quarter of 2024, according to the data which is run in partnership with the M&A Research Centre at Bayes Business School.
The M&A research tracks the number of completed deals over $100 mn and the share price performance of the acquiring company against the MSCI World Index, which is used as default, unless stated otherwise.
Jana Mercereau, Head of Europe M&A Consulting at WTW, noted that these significant deals reflect growing optimism in corporate boardrooms. Despite lingering uncertainty, especially with the upcoming US election, businesses are encouraged by the prospect of interest rate cuts and improving valuations.
Global M&A quarterly analysis volume
A string of blockbuster deals completed this year signal a growing confidence in corporate boardrooms. While uncertainty remains, particularly with an upcoming US election, renewed optimism, the expectation of more interest rate cuts and improving valuations are positive signs for businesses and investors looking to cut a deal in the months ahead.
Jana Mercereau, Head of Europe M&A Consulting at WTW
Companies completing M&A deals struggled to outperform the wider market
Despite this growth, companies completing M&A deals struggled to outperform the wider market. They underperformed by -9.0 percentage points in the third quarter of 2024, based on share price return.
Europe stands out as the only region to counter this trend, showing a positive performance for the first time since 2021. European dealmakers outperformed by +2.1 percentage points, with 38 deals completed in the last quarter, up from 32 during the same period in 2023.
M&A activity by regions
M&A activity in the Europe
M&A activity in the European financial afn insurance services industry rebounded in the first half of 2024 after a slow second half in 2023, according to EY’s analysis. However, the activity remains subdued.
The number of publicly disclosed financial services deals across Europe rose by 38% in H1 2024 compared to the previous six months, yet it declined by 3% year-on-year.
The total M&A value decreased from €23.8bn to €17.1bn in H1 2024, despite three deals exceeding €1bn each. A potential large deal in Spain could significantly increase deal value in the second half of this year.
M&A activity in the Asia Pacific
The Asia Pacific region also struggled, with buyers underperforming by -3.1 percentage points. A total of 30 deals were completed between July and September 2024, marking a negative shift in M&A performance.
North America continues to face tough conditions. Acquirers underperformed their regional index by -10.1%, marking the seventh consecutive quarter of underperformance. The volume also dropped, with 81 deals completed, down from the previous year’s third quarter.
M&A activity in the North America
In 2024, the North American market for mergers and acquisitions (M&A) continues its lackluster performance, largely attributed to persistently high interest rates that dampened corporate enthusiasm for deal-making for the second year in a row. Data compiled by S&P Global Market Intelligence reveals a notable contraction in the sector’s activity.
The aggregate value of M&A transactions in the United States and Canada plummeted to $1.222 trillion, marking a 15.3% decrease from the revised figure of $1.442 trillion.
Furthermore, the frequency of deals experienced a significant downturn, with the total number of transactions falling by 23.7% to 16,695, down from a revised total of 21,871 in the preceding year.
M&A quarterly analysis volume – North America
An analysis of monthly M&A deal volumes
An analysis of monthly deal volumes throughout 2024 exhibits a consistent trend of decline when juxtaposed with the corresponding months in 2023.
While stabilizing interest rates provide some confidence, dealmakers continue to face significant geopolitical and economic challenges.
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 mn which meet the study criteria are included in this research.
- Deal data sourced from Refinitiv.
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AUTHOR: Jana Mercereau – Head of Europe M&A Consulting at WTW
