Deal makers consistently beat the market over the last ten years, underlining M&A’s success as a growth strategy

Global study by Willis Towers Watson and Cass Business School

  • Over 8,300 M&A deals worth over $100m in value completed worldwide from 2008 to 2018 , with a combined value of $9.4tn.
  • Fifty-five per cent of these deals outperformed the market by a total of $227bn over the last decade. The 45 per cent that underperformed the market left $73.9bn on the table compared to the overall market performance.
  • Willis Towers Watson marks the 10th anniversary of its Quarterly Deal Performance Monitor with a review of the five biggest trends of the last ten years.

M&A deal making has been unequivocally shown to have delivered superior shareholder returns during the last decade, according to global M&A data compiled by Willis Towers Watson’s Quarterly Deal Performance Monitor (QDPM). Based on share price performance, companies actively engaged in M&A deals (valued at over $100 million) from 2008 to 2018 outperformed the market  by an average of 3.1pp (percentage points), demonstrating M&A as an effective tool for adding value.

The global study was conducted by Willis Towers Watson in partnership with Cass Business School.

Jana Mercereau, Senior Director in Willis Towers Watson’s Mergers and Acquisitions team, said:

“Some business leaders argue that organic growth is better than buying growth, but the track record of the last decade should make companies question this conventional view. Our data shows that companies that were disciplined acquirers consistently outperformed those that stayed away from deals. M&A, in short, has been a successful strategy for profitable growth.”

Report author Dr Naaguesh Appadu, Cass Business School, said:

“Lessons have been learnt from failures prior to the financial crisis. This has been evident from the past ten years of mergers and acquisitions. Skills and experience as much as scale are now the top drivers for firms to be successful in doing deals.”

According to study, the five biggest trends over the last ten years have been:

Bigger is Better. Mega deals, those valued at over $10bn, beat the index by 4.3pp, while large deals valued at over $1bn outperformed by 2.9pp. But medium deals ($100m-$1bn) only performed a marginal 0.1pp above the index. The biggest blockbuster deals are usually pursued by companies with significant M&A experience, which is likely to explain why they are more adept at delivering the biggest rewards for shareholders.

The rise of China. Chinese M&A activity reached historic highs in the last decade and doubled its market share, rising from $24.9 billion or 3.5% of the global M&A market in 2008 to $57.5 billion or 7.2% in 2018. Despite government restrictions on capital outflows and rising protectionism, Chinese outbound investment is still expected to reach further highs over the next decade.

UK shrugs off Brexit. UK-headquartered firms have consistently beaten the European index by 3.7pp and have maintained this performance level despite the country’s looming departure from the EU. The UK also remains Europe’s investment destination of choice thanks to a number of factors including its skilled labour force, political and economic stability, and market size.

Regional winners and losers. European dealmakers, as well as outperforming non-acquirers in their own region by 3.7pp, have been far more consistent than any other region, delivering on average a positive shareholder return in nine out of the last ten years. In contrast, US-based acquirers outperformed their regional index by just 1.5pp. A 10-year rolling average performance of 8.3pp keeps Asia-Pacific companies in pole position, but roller-coaster swings in the region have seen acquirers failing to add value for the last seven quarters in a row.

Industry winners and losers. Compared to other industries, Telecoms and Technology companies completing M&A transactions performed the worst by actually destroying value over the last ten years, with underperformances of 1.5pp and 0.5pp respectively. By contrast, Materials and Consumer Staples firms that completed deals delivered the strongest returns of 5.6pp and 5.3pp over the same period.

“Deal making is cyclical and success never guaranteed, with recent years proving especially difficult to deliver a deal without harming shareholder value, but the historical success of M&A as a growth strategy comes into sharp relief when you take a long-term view,” said Jana Mercereau.

“Our analysis suggests that companies will need to focus more on inorganic growth to meet their investors’ expectations. And, just as we have seen in the last decade, the winners will be those who get in the game and learn how to play it well.”


  • All analysis is conducted from the perspective of the acquirer.
  • Share-price performance within the quarterly study is measured as a percentage change in share price from six months prior to the announcement date to the end of the quarter in which the deal is completed.
  • All deals where the acquirer owned less than 50 per cent of the shares of the target after the acquisition were removed, hence no minority purchases have been considered. All deals where the acquirer held more than 50 per cent of target shares prior to the acquisition have been removed, hence no remaining purchases have been considered.
  • Deal data sourced from Thomson Reuters.

Featured Bayes Experts