Global M&A increases to $1.6tn in first three quarters of 2024 – BCG

October 17, 2024 (Preqin News) – M&A activity targeting acquisitions in North America climbed to $924bn in the first three quarters of 2024, largely driven by a 21% increase in US deal value, according to Boston Consulting Group (BCG).

M&A totaled $1.6tn in the first three quarters across 22,400 transactions globally. Although this represents a 10% growth from the same time last year, activity remains below historical norms and is less than half the value in Q1-Q3 2021 ($3.3tn).

BCG’s 2024 M&A Report: Early Signs of a Recovery anticipates increased deal-making activity in the coming months, with the US and Europe continuing to lead the charge. Overall, the value of European M&A totaled $353bn, a 14% increase over the previous corresponding period.

Political uncertainty made many investors cautious in the first nine months of the year. However, M&A deal value has surged in the wake of elections in the UK (+131%), France (+29%), India (+66%), which have provided investors with economic clarity. Deal value in the APAC region has fallen to a 10-year low of $263bn, driven by declines in China (-41%) and Australia (-7%).

Private equity M&A in the US also increased 37% from $133bn in Q1–Q3 2023 to $182.6bn over the same period this year, according to Preqin data. Dry powder peaked at $1.51tn in December last year, before ebbing to $1.37tn as of October 2024. Political clarity after the election could further stimulate deal-making in the US.

The most active sectors globally in M&A growth in 2024 were technology media, and communications deals (+36%), with financial institutions and real estate (+35%), and the consumer sector keeping pace (+35%). However, M&A activity in industrials (-42%), healthcare (-11%), and materials (-27%) fell compared with last year.

BCG also surveyed 129 executives across North America (39%), Europe (39%), and Asia (22%) and found that 47% of respondents considered shortcomings in their M&A target search process as a pain point in their organization. This was followed by the execution process taking too long (46%), the absence of a clearly defined or too opportunistic growth strategy (43%), and an insufficient process on post-merger integration and value creation (40%).

Firms regularly engaging in M&A can create experienced and well-coordinated teams, generate more value, and have higher success rates than one-time acquirers. Serial acquires had a two-year relative total shareholder return (TSR) of 1.4%, while inexperienced firms had a TSR of -0.9%.

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