(7 November 2024 – Global) As merger and acquisitions (M&A) activity flounders, activist investors have shifted away from selling down companies in dire straits and turned their hand to “king making” by replacing CEOs.
Barclays Shareholder Advisory Group finds that over the first three quarters of 2024, activists launched 184 campaigns globally. This figure is tracking 24 percent above the four-year average despite a two-year slump in M&A.
Barrons reports that Starbucks, Johnson Controls and CVS Health are all replacing CEOs on the back of activists picketing their board following a share price decline due to poor strategy or management. In 2022, the average time to a CEO exit was 138 days after an activist campaign began. In 2023, it was 113. In 2024, it’s 88.
“M&A is activists most common demand but calls to change management and the board have risen” commented Barclays Shareholder Advisory Group Head, Jim Rossman.
“Activism is spreading. The ten busiest activists accounted for 29 percent of this year’s campaigns, from 46 percent in 2023. First-time activists initiated 22 percent of 2024 campaigns, from 13 percent in 2023. We see M&A reviving in 2025 as private equity sells holdings. CEOs, rejoice….” Rossman added.