M&A markets shrink in first nine months of 2012

NEW YORK: The US merger and acquisition market fell 18.6% to $628.8 billion between January 1 and September 30, 2012, compared with the same period of last year.

NEW YORK: The US merger and acquisition market fell 18.6% to $628.8 billion between January 1 and September 30, 2012, compared with the same period of last year.

The global M&A market shrank 17.4% in the first three quarters of this year, down to $1.46 trillion in the period, according to the Mergermarket League Tables of PR Advisers.

Amanda Levin, editor for the Americas at Mergermarket, attributed the decrease in M&A deals to a “perfect storm” of a struggling global economy and an election year in the US. M&A deals typically decrease during election years, but the added pressure of a weakening global economy has led to an even bigger drop, she explained.

“Because we're probably going into another global economic recession, companies are very trigger shy right now about deals,” Levin said. “I think we will see more big ticket M&A deals announced after the election, possibly after we know if the Bush era tax cuts are going to continue. [Republican candidate] Mitt Romney is perceived to be more business-friendly, but even if he doesn't win, some certainty is really needed right now.”

Levin added that M&A activity in the fourth quarter of this year will be a good indicator of the shape of the market in 2013.

“If there's an uptick in M&A deals in Q4, we could be headed for a good year in 2013,” she said.

Brunswick Group topped the rankings for highest value of M&A deals in the US, advising on 65 deals worth $118.5 billion during the first three quarters of 2012. Ranked by deal volume, Kekst and Company led the rankings with 86 US deals worth $89.6 billion in the period.

Globally, Brunswick was again ranked first in terms of M&A value, working on 130 deals worth $180.8 billion. FTI Consulting advised on the highest number of M&A deals, providing counsel on 153 transactions totaling $101.3 billion during the first three quarters of 2012.

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