Global M&A slowdown to continue in 2020, yet challenging conditions offer springboard to better deals

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[{"type":"text","content":"A drop in North American deals will likely drag down global M&A activity and points to a more selective approach to acquisitions\nARLINGTON, Va., Jan. 09, 2020 (GLOBE NEWSWIRE) -- The global M&A market, with performance in steady decline since its peak in 2015, is forecast to struggle adding value in 2020; this is based on long-term data compiled by Willis Towers Watson and Cass Business School. Acquirers worldwide underperformed the Global Index by -5.0 percentage points (pp) over the past year for deals valued over $100 million1, based on share-price performance, and have now on average failed to add value from deals for three consecutive years.\n Global dealmaking is also at its slowest pace in six years, with 774 transactions over $100 million completed worldwide in 2019, significantly less than 2018 (904) and the lowest annual volume recorded since 2013 (720). Forty-two per cent of these deals were unable to add shareholder value in 2019. Global M&A deals – average performance 20092010201120122013201420152016201720182019Average Annual Performance (percentage points)*3.24.02.7-0.74.55.510.15.4-1.3-3.0-5.0 *The figures in the table show the annual median-adjusted performance of all acquirers. “Last year may have ended with a flurry of deals, but the global picture for mergers and acquisitions was patchy at best,” said Duncan Smithson, senior director, M&A, Willis Towers Watson. \"As regulatory, political, trade and economic uncertainties persist, the market will likely continue at a slow pace in 2020, with companies in wait-and-see mode, particularly in North America where many transactions are on hold due to trade tensions, a slowing US economy and because presidential election years tend to bring market volatility.” _______________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. 2020 M&A predictions Based on short- and long-term global trends revealed by the data, as well as conversations with clients and colleagues, Smithson shares M&A predictions for 2020: U.S. leads M&A slowdownCompleted deals are expected to remain low in 2020, driven by a slowdown in US M&A activity. In particular, the annual volume of large deals (valued over $1 billion) in 2019 was 173 – the lowes...

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