Mergers and Acquisitions to Remain Strong in 2022

In 2021, global deal makers achieved their first positive M&A performance for a full year since 2016, according to latest research on completed deals from Willis Towers Watson’s Quarterly Deal Performance Monitor (QDPM). Based on share price performance, companies making M&A deals outperformed the World Index by +1.4 percentage points on average.

Run in partnership with the M&A Research Center at The Bayes Business School (formerly Cass), the data also reveal that global activity achieved new highs as completed deals valued over $100 million reached 1,047 in 2021. This represents a significant increase over the previous year (674) and is the highest annual volume since Willis Towers Watson’s analysis began in 2008.

Deal volume in North America remained consistently strong during 2021, with acquirers closing 614 deals, almost double the 325 deals achieved in the previous 12 months, although they only outperformed their regional index by the narrowest of margins (+0.5 percentage points).

For the full year, Asia Pacific deal makers recorded their strongest performance since 2016, outperforming their index by +16.8 percentage points, despite closing only fractionally more deals regionally compared with 2020 (196 versus 173), as fewer Chinese acquisitions continued to depress volume levels. European acquirers outperformed their regional index, showing a positive performance of +3.9 percentage points and 199 deals closed in 2021, up a quarter on 155 deals in the prior 12 months. UK acquirers have consistently outperformed the FTSE All-Share index over the past five years, recording a positive performance of +5.7 percentage points for the year.

“The M&A boom in 2021 looks set to continue, fueled by abundant investment capital, strong equity markets and cheap debt, and companies under pressure to make their businesses greener by hunting for targets with the right climate credentials,” said Duncan Smithson, senior director, HR Mergers & Acquistions, North America, Willis Towers Watson. “M&A data from North America also highlights the impact that historically high asset valuations, pushed up by competition and increasing complexity, can have on deal performance. The question is whether prices being paid now will continue to make sense over time.”