Europe was the only region to enjoy a positive M&A performance in 2019 amid a global downturn that will continue into 2020, according to new analysis.
European dealmakers marginally outperformed their regional index by 0.6 percentage points over the last year despite a poor performance from UK buyers, according to research by insurer Willis Towers Watson.
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Willis Towers Watson’s Quarterly Deal Performance Monitor (QDPM) found that buyers in US and Asia Pacific underperformed their regional indices by minus 5.6 percentage points and minus 3.2 percentage points respectively, as they continued to struggle to unlock value from their deals.
“European acquirers have not only outperformed their counterparts in North America and Asia Pacific for the last two years, but also completed the fewest deals of any region in this period,” said Jana Mercereau, head of corporate M&A for Britain.
Worldwide, 699 deals completed in 2019, significantly down on the 904 deals made in 2018. Meanwhile 60 per cent of the completed deals have failed to add shareholder value, according to the study.
With the US and China locked in a bitter trade war, the number of completed Chinese deals fell to 72 in 2019, down from a record high of 243 in 2015.
Mercereau said she believes stunted growth will continue into 2020 on a global scale, saying: “As we move into a new decade, global deal making is likely to experience a continued hangover in 2020, with protectionism, a US presidential election and financial market volatility acting as a brake on M&A activity.”
But she added that the UK may enjoy a rebound in M&A interest under the new Tory government.
“The recent election results in Britain have already had an immediate positive impact on the British currency. We may now see a resurgence of activity both from and in Britain given the decreased level of uncertainty.”