Global M&A down
(28 March 2008 – Global) Recent data from Thomson Financial has shown that global Mergers & Acquisitions activity is down by 31 percent in the first quarter.
M&A activity fell to $US661 billion ($719.5 billion) from $US962 billion in the first quarter of 2007, according to data from Thomson Financial.
The two historically biggest markets, the US and Europe, both fell but by very different amounts.
Activity in Europe fell by a relatively low 10 percent, dropping to $US301 billion from $US334 billion.
In the United States, the fall was much more significant, bringing the global market down substantially as a result. Activity in the US fell 53 percent to $US189 billion from $US401 billion.
While last year activity in the US made up more than half of the global amount, this quarter it makes up less than one third.
Private Equity firms no longer make up such a large proportion of the M&A market, as backing banks are struggling to diversify the risk by on-selling these large loans. This is particularly the case in the US.
Acquisitions by private equity firms reached a four-year low of $US43.5 billion in the quarter with a fall of 77 percent from $US195 billion. Corporate M&A fell by 25 percent globally this quarter to $US479.9 billion from $US641 billion.
Citigroup, co-head of M&A for Europe, the Middle East and Africa, Ian Hart, said that current conditions make it harder to price and complete M&A deals as both debt and equity markets remain nervous after all the recent bad news.
The two historically biggest markets, the US and Europe, both fell but by very different amounts.
Activity in Europe fell by a relatively low 10 percent, dropping to $US301 billion from $US334 billion.
In the United States, the fall was much more significant, bringing the global market down substantially as a result. Activity in the US fell 53 percent to $US189 billion from $US401 billion.
While last year activity in the US made up more than half of the global amount, this quarter it makes up less than one third.
Private Equity firms no longer make up such a large proportion of the M&A market, as backing banks are struggling to diversify the risk by on-selling these large loans. This is particularly the case in the US.
Acquisitions by private equity firms reached a four-year low of $US43.5 billion in the quarter with a fall of 77 percent from $US195 billion. Corporate M&A fell by 25 percent globally this quarter to $US479.9 billion from $US641 billion.
Citigroup, co-head of M&A for Europe, the Middle East and Africa, Ian Hart, said that current conditions make it harder to price and complete M&A deals as both debt and equity markets remain nervous after all the recent bad news.
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