European Union: Duff & Phelps Publishes 2018 European Goodwill Impairment Study

Duff & Phelps published its 2018 European Goodwill Impairment Study (2018 Study) which examines general goodwill impairment trends across countries and industries within the European market. Now in its sixth edition, the 2018 Study analyzes companies in the STOXX® Europe 600 Index, which is comprised of large, mid and small capitalization companies across just under 20 countries of the European region, for the 2013 – 2017 calendar years. The 2018 Study also analyzes goodwill impairment trends and statistics for benchmark stock market indices in five countries:

  • CAC 40 in France
  • DAX in Germany
  • FTSE MIB in Italy
  • IBEX 35 in Spain
  • FTSE 100 in the United Kingdom

Highlights of the Study

Total goodwill impairment recorded by European listed companies in the STOXX® Europe 600 Index declined by 35% to €18.5 billion in 2017, dropping significantly for a second consecutive year. This was the lowest level in aggregate goodwill impairment for the STOXX® Europe 600 Index since 2010, the onset of the euro sovereign debt crisis. The number of goodwill impairment events fell by 9%, from 121 in 2016 to 110 in 2017, while the average impairment amount per event declined 28% from €234 million to €168 million over the same period.

Industry Highlights

Half of the 10 industries analyzed within the STOXX® Europe 600 Index saw their aggregate goodwill impairment amounts decrease. The top three industries with the most significant drop in goodwill impairment amounts in 2017 are as follows, in order of magnitude (€ billions):

  • Financials and Real Estate (€8.1 to €3.4)
  • Telecommunications (€7.0 to €2.4)
  • Consumer Discretionary (€5.0 to €0.9)

Out of the ten industries analyzed, Consumer Staples had the largest amount of goodwill impairment of €4.0 billion in 2017, countering the trend with a sharp €3.1 billion increase relative to 2016.

Geographic Highlights

At €5.7 billion, Switzerland was the country with the highest aggregate amount of goodwill impairments in 2017 within the STOXX® Europe 600 Index, increasing from €0.5 billion in 2016. Switzerland also had four out of the top 10 European goodwill impairments reported in 2017.

In contrast, and despite Brexit uncertainty, the U.K. saw the largest decline in aggregate goodwill impairment in 2017, reaching its lowest level since Duff & Phelps began tracking this data in 2010. France and Germany also saw notable declines in total goodwill impairment during 2017, a reflection of a stronger European economy.

The following trends were observed when reviewing goodwill impairment amounts for companies within other benchmark stock market indices in 2017 vs. 2016. Aggregate goodwill impairment (€ billions) for:

  • CAC 40 companies declined by a third
  • DAX companies decreased by nearly 40%
  • IBEX 35 companies doubled
  • FTSE MIB companies increased by 38%, although with only a slight rise in absolute (euro) terms
  • FTSE 100 companies plunged by 89%

Europe vs. United States: 2018 Goodwill Impairment Studies Comparison

In sharp contrast to the results of the European Goodwill Impairment Study, the 2018 U.S. Goodwill Impairment Study revealed a 23% increase in the aggregate goodwill impairment reported by U.S. companies. The rise in U.S. goodwill impairments from $28.5 billion in 2016 to $35.1 billion in 2017 was somewhat at odds with a strengthening global economy.

The number of impairment events increased by only 1.7%, but the average goodwill impairment per event rose by 21% in 2017. Yet, the average impairment amount of $120 million per event was still lower than the €168 million (or $202 million) observed for Europe STOXX® 600 companies.

Seven out of the 10 industries included in the U.S. study saw their aggregate goodwill impairment amounts rise in 2017, with Consumer Discretionary being hit the hardest. Telecommunication Services and Healthcare experienced the most significant goodwill impairment increases in 2017. This contrasts with Europe, where both Consumer Discretionary and Telecommunications saw dramatic declines in aggregate goodwill impairment.

In a year of global synchronized growth, 2017 saw strong U.S. deal activity, with a 9% increase in deal volume and a 3% increase in deal value. Historically, 2017 was one of the top years for mergers and acquisitions (M&A) activity, surpassed only by 2015 in terms of deal value.1

Unlike the U.S., European M&A activity plummeted in 2017, despite the generally favorable economic environment. The Eurozone saw a 10% decline in deal volume and a 70% drop in deal value (€ in billions) of closed M&A transactions. Notwithstanding Brexit uncertainty, M&A activity in the United Kingdom was essentially flat, with a 1% drop in deal volume and a 2% uptick in deal value.2

2018 Early Findings

In 2018, the top 10 goodwill impairment events within the STOXX® Europe 600 Index (disclosed as of the time of writing) increased to €13.3 billion, an 8.2% rise relative to the top 10 in 2017. By comparison, the top 10 goodwill impairment events soared in the U.S., reaching a staggering $54.2 billion in 2018, which represented a threefold increase from 2017.3

Visit to obtain copies of the 2018 European and U.S. Goodwill Impairment Studies.


1. S&P Capital IQ. M&A activity based on transactions closed in each year, where U.S. publicly traded companies acquired a 50% or greater interest.

2. S&P Capital IQ. M&A activity based on transactions closed in each year, where European listed companies acquired a 50% or greater interest.

3. The identity of the top 10 largest impairment events in 2018 may change once all companies report full-year 2018 results. European data for calendar year 2018 was compiled on February 25, 2019. Data for U.S. companies in calendar year 2018 was compiled on March 26, 2019.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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