US merger and acquisition activity reached USD13bn in August, the lowest level of monthly activity since February 1994 and the slowest month of August since 1992, according to a report
US merger and acquisition activity reached USD13bn in August, the lowest level of monthly activity since February 1994 and the slowest month of August since 1992, according to a report by Thomson Reuters.
Global M&A announced in August reached USD72bn, the lowest monthly level of activity since February 2003 (USD70.6bn) and the slowest month of August since 1994 (USD57.2bn).
In addition, with USD694m August recorded the lowest level of M&A fees paid globally since record began in 1998. European and US markets are equally affected and reached their lowest level on record with USD176m and USD216m respectively in August. With USD106m Asia reached its lowest level since September 2002. M&A fees paid to investment banks for deals completed in 2009 reached USD10.5bn so far, down 58 per cent from the same period last year.
Global buyside financial sponsored M&A in August reached USD2.4bn the lowest level of activity since December 2001. Europe and the US are at their lowest monthly levels since April 2002 and June 2009, reaching USD807m and USD1.1bn respectively. Global buyside financial sponsor activity accounts for only 3.2 per cent of total M&A activity for this month. With USD32.1bn, global buyside financial sponsored M&A is down 80 per cent year-to-date when compared to the same period last year.
With only ten deals above the USD1bn mark the average deal size fell to USD84m in August, its lowest level of the year so far.
A separate capital markets snapshot by Thomson Reuters shows that year-to-date global high yield corporate debt issuance totals USD89bn, a 150 per cent increase from last year at this time. High yield issuers ended the summer with a flurry of new issues during the week of 9 August, raising USD8.9bn from 20 new issues, the largest week for proceeds raised since March 2007 and the largest week for number of issues since December 2004.
As many financial issuers return to the global credit markets without government guarantees, the volume of debt capital markets activity from the financial sector accounted for 50 per cent of all new issues for August 2009, the highest percentage this year. Despite a greater proportion of volume coming from financial issuers, new debt issues for August total USD164.4bn, the slowest monthly total for global debt since October 2008.
For the fifth consecutive month, new IPO listings have topped the billion dollar mark after a dormant winter and spring. This month’s offerings from China’s Everbright Securities and India’s National Hydro Electric Power helped push monthly IPO volume to USD6.6bn. In the US, the market saw its biggest week for IPOs in 16 months, while there have been 32 new US IPO filings since July.
With the Swiss government’s sale of a USD5bn stake in UBS, a USD2bn offering from Australia’s Telstra and a USD1.7bn offering from Standard Chartered via JPM Morgan and UBS, year-to-date follow-on volume rose to USD386bn, a 35 per cent increase over last year.
