Companies that completed M&A deals in 2009 outperformed those who did not, according to the latest Deal Performance Monitor by Towers Watson and the UK’s Cass Business School. The global analysis showed that acquirers outperformed the MSCI World Index by 3.2%. Performance was strongest in health care and financial services, which beat the Index by 11.8% and 10.3% respectively.

 

Deal performance across the study sample was even stronger in the final quarter of 2009, with acquirers outperforming the Index by 4% for the period from six months before deal announcement to the end of the quarter.

 

Domestic deals resulted in better company performance than cross-border deals, the study found. Tower Watson explained this by saying that in domestic deals, acquirers have "less complex integration challenges." Though the company was quick to point out that this doesn’t mean companies should focus on just domestic deals, but to focus on overcoming the increased challenges associated with acquiring operations in "less familiar geographies and integrating across cultures."

 

In fact, the study found that many prospective buyers are focusing on their home markets due to the continued uncertainty in the credit markets and in the economy overall.

 

The study overview did not break down M&A by industry.

 

Read the study overview at Towers Watson’s Web site.