After a shaky start to 2024, a sluggish second quarter and, most recently, a volatile return to average activity levels, global M&A activity has been mixed this year, according to the 21st edition of the Global M&A Report from Boston Consulting Group (BCG).

Although there are signs of a strengthening market, M&A’s recovery will be far from smooth. Many dealmakers remain wary of regulatory bottlenecks and political and macroeconomic uncertainty.

In the first nine months of 2024, global aggregate M&A value edged up by 10% compared with the same period last year, totaling $1.6 trillion. Similarly, the number of megadeals (those valued at $10 billion or more) has continued its downward trajectory. Only 17 megadeals were reported in the first nine months of 2024, compared with 20 in the corresponding period in 2023.

Despite the caution, some players — especially in sectors such as energy, financials and technology — are forging ahead with strategic deals that promise to reshape industries. BCG also observed an uptick in larger deals in the consumer sectors. The forward-looking M&A Sentiment Index indicates more M&A activity on the horizon especially in the healthcare, technology and energy sectors.

“So far in 2024, many dealmakers have either stayed on the sidelines or tentatively dipped their toes in the water,” Jens Kengelbach, global head of M&A for BCG and a coauthor of the report, said. “But we’re finally seeing the first signs of recovery for global M&A — albeit slowly and steadily — with dealmakers in energy, financials and technology leading the pack.”

Regional Outlooks Diverge

The report takes a detailed look at deal activity across regions:

  • North America is a hub of activity. Deals involving targets in the Americas had a total value of $958 billion, an increase of approximately 13% versus the first nine months of 2023. The vast majority (worth $877 billion) involved targets in North America, which accounted for 55% of global M&A activity. U.S. companies acquired most of these targets.
  • European M&A is a mixed bag. The value of European M&A totaled $353 billion, a 14% increase over the first nine months of last year. Deal value in the UK increased by 131%, resulting in the country’s highest share of European dealmaking since 2015. Deal value also increased strongly in Sweden (111%), the Czech Republic (68%) and France (29%), driven by a few larger deals. In contrast, aggregate deal value was significantly lower than during the same period last year in Germany (–52%), Austria (–34%), Switzerland (–31%) and Italy (–25%).
  • Asia-Pacific dealmaking hits ten-year low: Deal value in Asia-Pacific declined by 5% to a ten-year low of $263 billion. Declines in China (–41%) and Australia (–7%) were major factors in the lower regional total. There were bright spots, however, including Malaysia (132%), India (66%), Singapore (48%), Japan (37%) and South Korea (10%).

Regulatory Hurdles and Election Uncertainties Slow Closing Timelines

Dealmakers are facing a new reality: tougher regulations and longer timelines. Regulators in major jurisdictions, including the U.S., Europe, the UKand Australia, are adopting more aggressive stances. At the same time, countries are implementing protectionist measures, often targeting specific industries. Election cycles in major markets have only added to the regulatory fog.

BCG’s report analyzes how these challenges affect the timelines and complexities of closing large M&A deals. Globally, for deals of $2 billion or more, the period from signing to closing stretched by 11% from 2018 to 2022, reaching 191 days. Deals with a European acquirer have the longest closing timelines, while those with a U.S. buyer have the shortest — although timelines are increasing in both regions.

In fact, BCG’s analysis of more than 300 deals finds that over 40% failed to close within the originally projected timeline, with deals of $10 billion or more the likeliest to face additional delays. Among those delayed deals, 63% required an at least an additional three months to close. Larger deals, particularly those touting high synergies, tend to be the most affected.

Dealmaking Experience Pays Off

BCG’s research shows that experience matters in M&A: companies that regularly engage in dealmaking create superior returns and have higher success rates, resulting in an outperformance of approximately 3% in relative total shareholder return (TSR), whereas less-experienced companies tend to destroy value.

To understand common pitfalls, BCG surveyed nearly 130 senior M&A executives across industries and regions. Respondents said the most significant challenge in their daily work is a lack of promising targets, with 47% citing shortcomings in their organization’s target search process. Nearly as many (46%) pointed to prolonged processes during transaction execution. Another 43% cited the absence of a clearly defined growth strategy or viewed their company’s approach as too opportunistic.

The Beginning of a New M&A Wave?

So far, 2024 has fallen short of expectations for a strong resurgence in M&A activity, but dealmakers benefit from several tailwinds as the year closes.

As a busy year of global elections comes to an end, dealmakers will soon have a clearer picture of the political outlook. In addition, many companies have healthy balance sheets with cash ready to be deployed in deals. What’s more, private equity (PE) firms’ dry powder reached a record $2.1 trillion at the end of September 2024, fueling the resurgence of PE dealmaking. Taken together with falling interest rates, these tailwinds could build momentum in deal activity heading into 2025.

Over the long term, the continued pursuit of green deals and the growing push for digitization (either to gain access to emerging technologies such as AI or to enhance capabilities and talent) will continue to fuel M&A’s recovery.

“In this period of relative calm, proactive preparation will separate successful dealmakers from those who are caught off-guard,” Daniel Friedman, global leader of transactions and integrations of BCG and a co-author of the report, said. “As the next wave of M&A nears, companies that prepare now will be the ones leading it.”

Download each of the four articles that make up the report here: