Longer deal timelines can raise costs and delay returns, making interim period management critical.
M&A closing timelines are lengthening worldwide amid heightened regulatory scrutiny and increased due diligence requirements.
Anecdotally, M&A deals across the board appear to be taking longer to close, but data segmented by deal size is limited; however, the data we do have on larger transactions shows that average timelines have extended significantly.
The period between signing and closing has risen for M&A transactions exceeding $2 billion, according to a recent analysis by the Boston Consulting Group. The increase is most pronounced for the largest deals, with those over $10 billion taking 27% longer to close than deals valued between $2 billion and $10 billion.
Deal timelines for transactions exceeding $10 billion have lengthened globally. In the Asia-Pacific region, it took an average of 452 days for such deals to close in 2022, a 125% increase from the 2018-2020 period. US and European deal timelines rose 66% and 19%, respectively, over the same timeframe.
Extended deal timelines reflect heavier regulatory scrutiny and an increased focus on detailed due diligence globally. Recent regulations, such as the EU Foreign Subsidies Regulation (FSR), have introduced additional complexities and potential delays to transaction timelines.
Prolonged closing timelines can tie up capital, increase transaction costs, and delay returns. Thus, managing the interim period between signing and closing is increasingly critical in M&A transactions. For strategies to navigate these delays and successfully close deals, see our piece “How to Navigate Deal Delays and Completion Uncertainty in an Era of Heightened Deal Complexity and Prolonged Interim Period.”
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