Global M&A performance set for record-breaking year

Deal-making performance hits all-time high for a first quarter, largely due to North America

ARLINGTON, Va., April 13, 2021 (GLOBE NEWSWIRE) -- Global mergers and acquisitions (M&A) performance surged in the first quarter of this year, continuing the momentum gained in the final months of 2020 and fueled by a flurry of completed deals. This represents an extraordinary rebound of deal activity and performance, even as ongoing waves of COVID-19 continue to trigger lockdowns and affect the world economy.

Based on share price performance, buyers outperformed the market¹ by +13.8 percentage points for deals valued over $100 million in the first three months of 2021. These are the second highest figures for any quarter since Willis Towers Watson launched the Quarterly Deal Performance Monitor (QDPM) in 2011. The data also maintain the long-term trend for deals outperforming the market since the global financial crisis (+2.3 percentage points).

Run in partnership with the M&A Research Centre at The Business School (formerly Cass), the data underscore the scale of the rebound in deal-making activity, which started toward the end of last year after plummeting in the early days of the pandemic. The number of deals was up by 21% from a year ago, with 206 deals completed in the first three months of 2021 (compared with 170 in the first quarter of 2020).

This rise in deals is largely due to the North American region, where volumes were up 33% year on year, and makes the first quarter of 2021 the region’s second largest first quarter on record. North American acquirers also outperformed their regional index by +16.3 percentage points, the second consecutive quarter the region has achieved a positive performance.

“U.S.-based deals are responsible for much of this remarkable resurgence in activity, which looks set to continue through 2021, triggered by the Biden administration’s $2 trillion dollar infrastructure and economic stimulus plan, booming stock markets, vast sums of cash to deploy and sustained low interest rates,” said Duncan Smithson, senior director, Mergers and Acquisitions, Willis Towers Watson.

Acquirers from Europe continued their strong form by outperforming their regional index by +12.1 percentage points in the first quarter of 2021, with U.K. buyers also adding value in this period. Meanwhile, Asia Pacific acquirers strongly outperformed their regional index by +17.0 percentage points.

The first three months of the year saw 58 large deals completed (deals in the range of $1 billion to $10 billion), compared with 44 in the first quarter of 2020, which is the highest first quarter result since 2008. Deal-making performance also improved in every sector of the economy, an almost unprecedented outcome.