Wed, Aug 17, 2022
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Companies that executed M&As have performed well in 2019, survey finds

Friday, August 23, 2019

Laxman Pai, Opalesque Asia:

About half of companies buying other businesses' divested assets in the first half of the year outperformed an industry benchmark by an average of 1 percentage point (pp), while two-thirds of companies divesting assets during that period underperformed by 7pp.

According to Willis Towers Watson's Divestment Performance Monitor 53% of organizations that fall under the M&A umbrella have outperformed their industry benchmarks - based on share price performance in the first half of 2019.

The study, conducted in partnership with Cass Business School, shows the size of divestments affects the performance of the divesting company.

Companies divesting up to 5% of their total company value underperformed the market by an average of less than 1pp, while those divesting more than 15% underperformed by an average 6.3%.

The longer-term trend for firms divesting parts of their business has been similarly challenging with performance over the past three years at -3.6 pp and over the past decade at -2.8 pp.

The study also shows that the volume of divestments worth over $50m in the first half of this year has declined to its lowest level in the past decade, with 251 transactions taking place in H1 2019 compared with an average half-year total of 314 over the past decade.

Spin-offs were the only deal type to successfully buck the negative trend for firms divesting parts of their business, with a positive performance of +1 pp above the......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: Hong Kong manager expects additional tailwind in Asian markets[more]

    B. G., Opalesque Geneva: The Asia equity markets have not been at their best so far this year, with the MSCI Asia index down almost 13% YTD, but many managers remain buoyant about the region, as in

  2. Opalesque Exclusive: Emerging markets persist despite headwinds[more]

    Bailey McCann, Opalesque New York: Emerging markets have been under significant pressure since the start of the year, but there are some nascent trends that suggest that things could be getting better. Emerging markets firm Gramercy Fund Management recently released its third quarter outlook and

  3. Opalesque Exclusive: Castle Hall's DiligenceExchange free Transparency Reports cover 100 managers with $10tn of assets[more]

    Matthias Knab, Opalesque for New Managers: Managers and investors can get free access to DiligenceExchange here: https://bit.ly/DXCInfo Castle Hall, the Du

  4. Other Voices: ESG exuberance is at all-time highs. But will investors buy?[more]

    As investors increase their focus on mission-based investing, they continue to grapple with ESG and what it means to them. By David Shalom, Director of Capital Introductions at Pershing Innovation. New investment solutions. That's how managers deliver value and attract new inve

  5. Opalesque Exclusive: This European mezzanine debt strategy offers equity-like returns with downside protection[more]

    B. G., Opalesque Geneva for New Managers: Mezzanine financier SIG-i operates in a relatively uncrowded space by proactively manufacturing financing solutions as an alternative to traditional debt and equity instrume