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Global M&A appetite remains strong with busy start to 2022

Global merger and acquisition (M&A) activity has seen a strong start to 2022 with the number of completed deals valued over USD100 million in the first quarter exceeding the same period last year.

Supported by historically low interest rates, increased market confidence, abundant capital and the pursuit of transformative deals, 220 transactions were closed in the first three months of 2022, according to research from WTW’s Quarterly Deal Performance Monitor (QDPM). This is the second highest Q1 result since 2008, achieved despite the sharp fall in SPAC deals recorded since the second half of 2021.

Run in partnership with the M&A Research Centre at The Bayes Business School (formerly Cass), the data reveals an even higher number of mega deals (valued over USD10 billion) closed in the last three months compared to the corresponding period in 2021 (six vs five), when the market experienced an extraordinary rebound in deal activity. Foreign takeovers of UK firms also surged to the highest point since 2015 with 13 deals completed in Q1 2022.

A direct impact of the sustained high levels of global M&A activity has been to push valuations to new highs, potentially a major factor for acquirers that struggled to unlock value from deals during Q1 2022. Based on share-price performance, companies that completed deals valued over $100 million underperformed the World Index[1] by -4.4pp (percentage points) on average during this period.

All regional acquirers, except in Asia-Pacific, underperformed in Q1 2022. APAC acquirers outperformed their regional index, showing an overall performance of +13.3pp with 46 deals closed in Q1 2022. Meanwhile, North American acquirers underperformed their index by -5.3pp with 116 deals closed in the first three months of 2022, and dealmakers from Europe underperformed their index by -4.3pp with 49 deals completed.

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