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Amid tougher economic and financial conditions, global merger and acquisition activity fell to a three-year low in the first half of 2023, according to Refinitiv.

The firm reported that worldwide M&A activity dropped by 37% in the first half to US$1.3 trillion. While the value of dealmaking was down sharply, the volume of deals was 9% lower, it said.

U.S. M&A, which represents the largest share of deal activity, was down by 40% in the first half. The value of European transactions dropped by 49%, and deals in the Asia-Pacific market were down by 35%, Refinitiv said.

The decline in M&A deals was led by a drop in so-called “mega deals” — transactions worth over US$10 billion — which fell by 53% year over year, marking the lowest total since 2017.

Sub-US$500 million deals were also down by 36%, Refinitiv said.

The report also noted that the value of private equity-backed M&A deals was down by 49% in the first half to US$278.6 billion.

Despite the weakness in the first half overall, Refinitiv reported that the second quarter was the strongest period for the past 12 months, with global deal value up 33% on a quarter-over-quarter basis.

Goldman Sachs remained the world’s top-ranked M&A advisory firm, followed by JP Morgan, Morgan Stanley and BofA Securities. Centerview Partners LLC ranked fifth overall, a jump from 10th place in the same period last year.

BMO Capital Markets was the top-ranked Canadian firm, taking ninth place in the global rankings — a sharp jump from 49th place in the first half last year.

RBC Capital Markets was the only other Canadian firm in the top 25 worldwide, climbing to 14th place in the global rankings from 19th last year.