Global M&A volumes fell 31% to $661 billion in the first quarter of 2008, according to Thomson Financial. Buyout firms led the collapse in deals as their buying power evaporated and they saw a 77 percent fall in acquisitions after 6 years' growth.
The credit crunch has dented banks' confidence in lending to buyout firms, which rely on debt to achieve their returns.
Meantime slowing U.S. and European economies and volatile markets are making corporate CEOs reluctant to take large risks.
After four years U.S. M&A activity is on track to see its first annual decline since 2002, according to a recent report from Thomson Financial Proprietary Research.
Europe remained ahead of the U.S. in terms of deal volumes and also better-weathered the downturn. European M&A activity accounted for 301 bln usd, which is 10 pct lower than in the first quarter 2007.
Goldman Sachs advised on the most merger and acquisition deals worldwide in the first quarter of this year, followed by Lehman Brothers and Citigroup. Morgan Stanley, which had led the rankings in the same period last year, dropped to number 6.
The top global M&A advisors in the first quarter of 2008 are, in descending order:
Goldman Sachs , Lehman Brothers , Citigroup , Credit Suisse , Deutsche Bank, Morgan Stanley, Centerview Partners, JP Morgan, Merrill Lynch.
Goldman Sachs worked on 81 deals worth $231.5 billion, followed in the second and third spots by Lehman Brothers and Citigroup Inc, which advised on global deals worth $203 billion and $190 billion, respectively.
Citigroup was the most active adviser on deals with a European element. It worked on 42 of these transactions worth $161.6 billion. Credit Suisse was the next most active bank in this respect, working on 36 deals worth $149.7 billion, followed by Goldman, which advised on deals worth $147 billion.
Goldman led in terms of estimated fees for the quarter as well. It earned fees of $399.9 million from its global M&A work, including $200 million for deals including European element.
Merrill Lynch and Credit Suisse were the next most profitable in terms of global fee revenue. Merrill earned $291.8 million and Credit Suisse earned $287.6 million.
In Europe, Morgan Stanley (MS) was the second most lucrative fee earner. It generated $181 million in fees from M&A, followed by Merrill Lynch, which earned $168.6 million.
Announced M&A deals in the US were even lower at a five-year low of 189 bln usd, 53 pct lower than in the first quarter 2007 (401 bln usd). The US recorded the lowest first quarter figures since 2003 (71 bln usd).
Thomson Financial's M&A review also showed a shift in the ranking of investment banks advising on M&A deals in the first quarter of 2008.
Globally, Goldman Sachs Group Inc reached pole position in the year to date, with mandates for deals valued at 231.5 bln usd. In the first quarter of 2007 it was ranked second.
The investment banking arm of Lehman Brothers Holdings Inc soared from sixth place in the first quarter of 2007 to second place in the global ranking, with mandates valued at 203.5 bln usd this year.
In the category of transactions with any European involvement, Citigroup Inc led the pack in the first quarter of 2008, with mandates worth 161.6 bln usd, followed by Credit Suisse Group (149.7 bln usd), Goldman Sachs (147 bln usd) and Lehman Brothers (141.2 bln usd).
U.S. merger volumes are estimated to reach only about $1 trillion in 2008. Still, report said “Looking at the second half of 2008, an improving credit market along with a significant level of available funds for private equity to put to use will likely boost the environment for M&A gains,” the.
News and Related Story Links:
Reuters – Global M&A volumes tumbled by a third in Q1
The Age – M&A bankers suffer 35% drop in fees
CNN Money – Global M&A value drops 31 % to $661 bln in Q1; US value drops 54%
Money Morning – Don’t Be Fooled by a Lull in M&A Activity, More Deals Are on the Way
The credit crunch has dented banks' confidence in lending to buyout firms, which rely on debt to achieve their returns.
Meantime slowing U.S. and European economies and volatile markets are making corporate CEOs reluctant to take large risks.
After four years U.S. M&A activity is on track to see its first annual decline since 2002, according to a recent report from Thomson Financial Proprietary Research.
Europe remained ahead of the U.S. in terms of deal volumes and also better-weathered the downturn. European M&A activity accounted for 301 bln usd, which is 10 pct lower than in the first quarter 2007.
Goldman Sachs advised on the most merger and acquisition deals worldwide in the first quarter of this year, followed by Lehman Brothers and Citigroup. Morgan Stanley, which had led the rankings in the same period last year, dropped to number 6.
The top global M&A advisors in the first quarter of 2008 are, in descending order:
Goldman Sachs , Lehman Brothers , Citigroup , Credit Suisse , Deutsche Bank, Morgan Stanley, Centerview Partners, JP Morgan, Merrill Lynch.
Goldman Sachs worked on 81 deals worth $231.5 billion, followed in the second and third spots by Lehman Brothers and Citigroup Inc, which advised on global deals worth $203 billion and $190 billion, respectively.
Citigroup was the most active adviser on deals with a European element. It worked on 42 of these transactions worth $161.6 billion. Credit Suisse was the next most active bank in this respect, working on 36 deals worth $149.7 billion, followed by Goldman, which advised on deals worth $147 billion.
Goldman led in terms of estimated fees for the quarter as well. It earned fees of $399.9 million from its global M&A work, including $200 million for deals including European element.
Merrill Lynch and Credit Suisse were the next most profitable in terms of global fee revenue. Merrill earned $291.8 million and Credit Suisse earned $287.6 million.
In Europe, Morgan Stanley (MS) was the second most lucrative fee earner. It generated $181 million in fees from M&A, followed by Merrill Lynch, which earned $168.6 million.
Announced M&A deals in the US were even lower at a five-year low of 189 bln usd, 53 pct lower than in the first quarter 2007 (401 bln usd). The US recorded the lowest first quarter figures since 2003 (71 bln usd).
Thomson Financial's M&A review also showed a shift in the ranking of investment banks advising on M&A deals in the first quarter of 2008.
Globally, Goldman Sachs Group Inc reached pole position in the year to date, with mandates for deals valued at 231.5 bln usd. In the first quarter of 2007 it was ranked second.
The investment banking arm of Lehman Brothers Holdings Inc soared from sixth place in the first quarter of 2007 to second place in the global ranking, with mandates valued at 203.5 bln usd this year.
In the category of transactions with any European involvement, Citigroup Inc led the pack in the first quarter of 2008, with mandates worth 161.6 bln usd, followed by Credit Suisse Group (149.7 bln usd), Goldman Sachs (147 bln usd) and Lehman Brothers (141.2 bln usd).
U.S. merger volumes are estimated to reach only about $1 trillion in 2008. Still, report said “Looking at the second half of 2008, an improving credit market along with a significant level of available funds for private equity to put to use will likely boost the environment for M&A gains,” the.
News and Related Story Links:
Reuters – Global M&A volumes tumbled by a third in Q1
The Age – M&A bankers suffer 35% drop in fees
CNN Money – Global M&A value drops 31 % to $661 bln in Q1; US value drops 54%
Money Morning – Don’t Be Fooled by a Lull in M&A Activity, More Deals Are on the Way
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