The return of M&A deal-making which began to accelerate towards the end of the third quarter this year has continued into the final quarter, where USD575bn worth of deals have been announced so far, according to a report by mergermarket.
Quarter four looks set to be the largest value by quarter since the third quarter of 2008.
Overall activity for the year is 30 per cent down from 2008, a percentage which has improved steadily over the course of the year.
While US M&A activity continues to dominate the global scene, the Asia-Pacific region is the only market achieving close to its 2007 peak by value (currently only down five per cent), offering a glimpse of where future growth potential lies.
The increase of M&A deals also includes a rise in activity in the moribund leveraged buyout industry. Many of these transactions were small when compared with the strategic takeovers that made up the bulk of the 2009 deal-making activity, however there is much to suggest that larger and more frequent LBOs are in the offing.
Debt to Ebitda multiples have increased significantly since the third quarter, providing private equity with the leverage required to execute deals. Most recently, mainstream LBO firms have emerged as bidders for the set-top box business being sold by Motorola in a deal that could be valued at up to USD 5bn.
According to mergermarket, Morgan Stanley is just ahead of Goldman Sachs so far in the global M&A league tables and if it maintains this lead to the end of the year it will knock Goldman Sachs off the top for the first time in recent years.
The dynamic duo of the M&A world have benefited from advising clients across the globe on the majority of the largest transactions in sectors as far apart as Australian commodities and American healthcare and technology.
In many cases bankers at the two firms advised the same clients on the same deals, as is the case with Cadbury in its bid to fend off Kraft Foods as well as Rio Tinto and BHP Billiton on the combination of their Australian iron ore assets.
J.P. Morgan takes third place in the value and volume tables with its ranking due primarily to its role advising on US takeovers, most recently advising ExxonMobil on its USD40.4bn takeover of XTO Energy. However, its position in the European and Asia-Pacific league tables was less remarkable.
Independent advisory firms and corporate finance boutiques such as Lazard, Rothschild and Evercore Partners have also fared well in 2009, buoyed by key roles on large corporate restructurings. These firms all had a part in the largest of such deals, the USD48.2bn sale of GM assets to the US government.
