ice freeze / Yevgeniy Drobotenko

Global merger and acquisition activity dropped in the first quarter as markets were roiled by rising inflation and the flaring of geopolitical conflict.

Market data firm Refinitiv reported that the value of global M&A declined by 21% in the first quarter, compared with the same quarter last year, and the volume of deals was down by 17%.

Compared with the fourth quarter of 2021, the drop was even more precipitous, with deal value declining by 34% quarter over quarter.

Nonetheless, the market still recorded US$1.0 trillion worth of transactions in Q1, marking the seventh consecutive quarter above that figure.

The tech sector continued to lead M&A activity, with US$258.9 billion worth of deals in the first quarter — which is down by 5% from a year ago, but accounted for 25% of overall M&A value in Q1, up from 17% in 2021.

The financial sector ranked second, with a 13% share of the action, and real estate was third at 12%.

Refinitiv also reported that the market saw an increase in private equity-backed buyouts in the first quarter, with these deals making up 29% of the overall transaction value.

Conversely, deals involving SPACs dropped sharply from 17% of the overall M&A activity in the first quarter last year to just 3% this year.

The M&A league tables were largely unchanged from last year, with Goldman Sachs continuing to dominate. JP Morgan remained ranked second in global M&A, and Morgan Stanley stayed in third place.

RBC Capital Markets was the top ranked Canadian firm, in 14th place overall, up from 24th a year ago. TD Securities placed 25th, down from 16th place in 2021.