Merger and acquisition activity was supposed to be one of the beneficiaries of a new business-friendly U.S. government — however, new data from LSEG Data & Analytics reveals that dealmaking faltered in the U.S. in the first quarter, weighing on global M&A.
In the U.S., deal value was down by 14% on a year-over-year basis in the first quarter, with $386.2 billion (all figures in U.S. dollars) worth of transactions announced in the period.
The volume of deals in the U.S. was also down 19% in the quarter, the data showed.
The weakness in U.S. M&A resulted in its share of global deal activity dropping from 58% in the first quarter of 2024 to 43% this year, which was its lowest share since the first quarter of 2020.
Despite the U.S. slowdown, global M&A was up in the first quarter, rising by 15% year-over-year to $885.2 billion.
Dealmaking in the Asia-Pacific region rose by 59% in the first quarter, led by a 123% jump in China, and European M&A was up 12%. In both regions, M&A activity reached its highest level in three years, LSEG noted.
By sector, the tech and financial industries led the way in dealmaking activity, with each sector accounting for about 19% of total deal value. The value of financial sector deals was up 50% year-over-year, while tech deals rose by 21%.
LSEG also reported that the value of deals that involved private equity-backed buyouts surged by 26% in the first quarter, and accounted for 21% of overall M&A activity.
Goldman Sachs continued to top the global league tables for M&A advisory business, followed by JP Morgan and Morgan Stanley.
RBC Capital Markets was the highest-ranked Canadian firm in 15th spot globally, followed closely by TD Securities Inc. and BMO Capital Markets in 17th and 18th place, respectively. CIBC World Markets Inc. also joined the global rankings, taking 25th place overall.
However, for transactions involving a Canadian company (as either the buyer, or the target) Goldman Sachs was the top advisor in this segment, the data showed, followed by Morgan Stanley. BMO, TDSI and Barclays rounded out the top five.