After a record-breaking year for M&A in 2007, preliminary figures for Q1 2008 show what looks to be one of the slowest quarters for the past few years.
After a record-breaking year for M&A in 2007, preliminary figures for Q1 2008 show what looks to be one of the slowest quarters for the past few years.
Global activity is down 27 per cent by volume and 14 per cent by value from the same period last year, currently standing at 2,322 deals worth a total of USD580.5bn.
This year’s headline grabbing deal is BHP Billiton’s offer for Rio Tinto. The all share offer values Rio Tinto at an enterprise value of approximately USD211 bn and is the one deal that has dominated the league tables to date.
The major US and international fi rms are still topping the global league tables, however they have advised on fewer deals so far this quarter compared with the same period in 2007, with the BHP/Rio Tinto deal inflating their value figures. While leveraged activity is experiencing a major slow down, corporate deals are still being done.
Discussions between Microsoft and Yahoo, and Staples and Corporate Express are just a couple of examples. Large deals are few and far between so far this year. There have been 75 deals over USD1 bn announced globally so far this year, compared to 113 for the same period in 2007.
Despite running behind UBS in the global league tables, Credit Suisse has had a particularly strong quarter so far, advising on four of the top five deals globally in the year to date. So Credit Suisse is the current leaders in the European tables.
The financial services sector is looking particularly unstable this quarter, despite having consistently the hottest industry by value in recent quarters. Aside from the widely publicised issues within the industry there are few deals being done in the sector, and Mergermarket intelligence shows little in the pipeline.
BHP Billiton’s EUR144bn bid for Rio Tinto has pushed European value figures to 952 deals worth EUR254bn so far this quarter. Without the announcement of this deal in Q1 this year, European M&A would currently be experiencing the slowest quarter by value since Q2 2004.
The four largest deals globally announced so far this year all involve a European target.
Credit Suisse is currently the regions’s major player, having advised on all four of these deals and is the frontrunner for topping the league table by value this quarter.
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