Global M&A slows as China falls while holding companies stay on the sidelines

Global mergers and acquisitions activity in adland slowed markedly in 2019 according to new figures from consultancy R3 Worldwide.

R3 clocked 489 deals worth a total $27.7bn in 2019, down 15 per cent on the previous year. North America was by far the strongest market with China leading APAC down with a 54 per cent drop, reflecting the trade war with the US and a slowing economy.

The biggest deal was Publicis Groupe’s purchase of data firm Epsilon at a heady $4.4bn. Publicis led the list of acquirers ahead of Bain Capital (which bought 60 per cent of WPP’s Kantar) and Accenture which bought creative agency Droga5 for $450m.

Top buyers ($m)

1/Publicis 4164

2/Bain Capital 3100

3/Accenture 1460

4/Blackstone 760

5/Dentsu 397

6 S4Capital 378

7/CVC Capital Partners 350

8/Providence Equity Partners 320

9/Legacy/Blue Focus 300

10/Proof/Analytics 288

Dentsu did the most deals with 12. The other big ad holding companies are notable by their absence, especially WPP which was the busiest acquirer under former boss Sir Martin Sorrell. Sorrell’s new S4Capital kept the ball rolling though by spending $378m.

R3 Principal Greg Paull says: “Restructuring has shifted attention away from volume and forced holding companies to attend to integration. It’s been about what’s going to help win new business.”

Experiencing the most growth in 2019 were production houses and shopper/CRM/promotion companies, which saw double-digit upticks in both number of transactions and value.

Paul says: “More clients are looking for enterprise-wide transformation and this is leading buyers to balance their portfolios.” The top 10 deals in 2019 included data and research (Kantar, JD Power), retail and customer experience (Triad, Rightpoint) and CEO consulting (Teneo).

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