M&A Market Remains Lackluster

Thomson Reuters’ Business Law Currents recently announced the release of the Business Law Advisor’s special report focused on Q3 Global M&A Trends (sign in required). The report was far from happy reading for most M&A lawyers around the globe.

Global M&A markets have continued to flounder in the third quarter of 2012. Plagued by ongoing worries regarding the state of the global economy and political uncertainties in the U.S. and the Middle East, potential acquirers are maintaining a tight hold on their purse strings.

Over the past quarter, deal volumes fell to their lowest level since 2005, declining 8% as compared to Q2 2012. Deal values also declined, dropping 11% versus Q2. Both numbers also fell when compared with the same period last year.

Global M&A Deal Activity by Quarter

Source: Thomson Reuters Business Law Advisor’s M&A Trends & Insight for Lawyers 2012 Q3 Report

Though the number of high-value deals (>$500M) was largely unchanged from Q2, the value of those deals declined by 9%, reflecting fewer mega-deals in the market. Within the mid-market ($50 – $500M), deal values fell by 19% versus Q2, with deal volume falling similarly. Deals under $50 million were also down by 8% in value as compared to Q2.

On a country basis, a comparison of the twelve-month period ending September 30, 2012 with the prior twelve-month period revealed few positives. Of the 16 most active nations globally, only two enjoyed domestic market growth; Russia (28%) and Brazil (a more modest 6%). All 16 of the most active regions experienced declines in cross-border M&A.

A quarter by quarter comparison of 2012 indicates that activity levels in the U.S. market, while somewhat uninspiring, held their own when compared with global market performance. Total deal values in the U.S. market continued quarter-on-quarter growth through Q3, as did domestic deal volumes (a rise of 3% in Q3 compared with Q2). However, cross-border deal volumes declined by 8% in Q3 2012 compared with Q2.

Source: Thomson Reuters Business Law Advisor’s M&A Trends & Insight for Lawyers 2012 Q3 Report

For more information on M&A market trends and analysis from around the globe, please visit the Business Law Advisor website: http://advisor.westlawbusiness.com.

Posted by Tricia Pelton