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Winner’s curse hitting M&A market

Returns for companies on the acquiring end of M&A relationships dipped recently in the quarters their respective deals closed. The average return, globally, for acquirers in the second quarter was -6.2% over their regional MSCI index, after falling 3.9 and 3.3 percentage points behind the indexes in Q1 2018 and Q4 2017, respectively. All three periods were below the one- and three-year rolling averages.

The second quarter was the third consecutive quarter for which shares of the acquirer fell in the quarter of their deal for those based in North America, negatively impacting the global sample accordingly. However, it was the first quarter when European acquirers fell, albeit modestly.

Global deal volume was 191 in the second quarter, down from 209 in the first. Deal activity began to trend higher in 2014, hitting a 10-year peak in the fourth quarter of 2015 at 307 deals

*Second quarter 2018 returns are as of June 22.