In a follow-up to the first edition ofGender Diversity & M&A Outcomespublished in 2020, SS&C Intralinks, in partnership with Mergermarket and the M&A Research Centre (MARC) at Bayes Business School, City, University of London, has released a follow-up report. Historic M&A activity from the second half of 2020 set the stage for the research—the total value of all deals across 2021 came to $5.7 billion, representing an 83% annual rise over 2020 and overtaking the previous record set in 2015. It is against this backdrop that we analyzed more than 11,000 M&A deals and spoke to a panel of senior leaders to discern the differences between the outcomes of deals initiated by companies with female leadership and those with less gender diversity at the CEO and board level.
Some key findings from Gender Diversity and Dealmaking 2022:
Market perceptions remain out of line with M&A reality:While the perception of deals conducted by female CEOs or boards with at least 30% female representation has improved since our previous research, those deals are still viewed less favorably than those conducted by male counterparts. The market-adjusted acquirer share price returns were 1.5 percentage points lower for deals where the acquirer had a female CEO when looking at a 40-day window around the announcement date.
Diversity and female leads improve performance:Diverse boards and female CEOs produce better results post-deal than male CEOs or less gender-diverse boards across several key indicators.
Female CEOs complete more deals:Deals announced by female CEOs have slightly higher completion rates relative to deals announced by male CEOs—97% versus 95%—and the gap widened to five percentage points for deals completed during the COVID-19 pandemic.
Deal structures differ with diversity and point the way to success:Acquirer companies with female CEOs and boards with 30% or more female representation are more likely to seek advice, more risk-averse, and tend to seek out targets with stronger performance metrics.
Female leaders and diverse boards have performed better during the pandemic:Acquirer companies led by female CEOs and gender-diverse boards saw their share prices perform better one-year post-transaction completion than those led by male CEOs or with less gender-diverse boards.
Our research shows that the benefits of females in leadership positions within M&A transactions are clear and proven, but that a bias may be holding back progress. Change is happening, but not quickly enough. Businesses must continue to do their part in supporting female dealmakers by razing the barriers standing in their way, helping them achieve their highest potential and, in turn, create maximum value for all stakeholders.