M&A Activity Shows Strong Growth in 2024 Amid Challenges

The M&A activity in 2024 is showing strong growth, especially in large transactions, according to WTW’s Quarterly Deal Performance Monitor. The number of deals valued over $1 billion has risen significantly, reaching its highest level in two years with a 31% increase compared to the previous year. Megadeals, specifically those over $10 billion, have also surged, indicating renewed confidence among dealmakers despite geopolitical and macroeconomic uncertainties.

However, the total number of smaller deals, specifically those valued over $100 million, has seen a decline, with 157 transactions closing in the third quarter of 2024, down from 188 in the last quarter of 2023. The trend toward intra-sector deals suggests companies are consolidating within their industries, with such transactions rising to 75% of the total in the latest quarter. Despite the increase in large deals, M&A companies have underperformed in the wider market, reflecting ongoing challenges, especially in North America, where the market has seen continued underperformance over several quarters.

Mercereau from WTW highlighted the necessity for due diligence and planning for successful integration to unlock long-term value from these M&A activities. Although interest rates are stabilizing, significant geopolitical uncertainties remain for dealmakers in different regions, including North America and Asia-Pacific, where deal activity has dropped substantially.