Big American deals support M&A volumes

Marion Dakers

Global DCM volume by world region A HANDFUL of blockbuster mergers and acquisitions in the United States have helped lift worldwide M&A volumes in the first quarter of the year, making up for Europe’s listless deals market.

Global volumes rose two per cent on last year to $596bn (£393bn), according to figures from Dealogic released yesterday. But the number of deals dropped a third to 7,771.

US-targeted M&A soared 69 per cent to a value of $289.6bn, helped by Warren Buffett’s $23bn bid for HJ Heinz and the $64bn AbbVie spin-off, which completed in January.

But in Europe, deal volumes slumped to the lowest level since 2002, in spite of a handful of large bids including Liberty’s $24.1bn offer for Virgin Media.

Cross-border M&A was down 15 per cent to $149.9bn, making up a quarter of all deals.

JP Morgan retained its place as the biggest M&A bank in the world in the three months to 25 March, while Goldman led in Europe.

Global investment banking revenues totalled $15.8bn in the quarter, down six per cent on last year, Dealogic said.

The equity capital markets were less subdued, as volumes rose 12 per cent to $180.3bn and the value of IPOs worldwide spiked almost a third higher than a year ago at $22.7bn.

The number of floats sank a third to 137, however. The biggest float in the quarter was Zoetis, the animal health business that raised $2.6bn when it spun off from Pfizer.

Europe was one of the few regions to see a decline, with values down seven per cent to $38.1bn.

The global debt markets also took a dive, falling more than a fifth to $1.59 trillion in the first quarter, with deal numbers down 31 per cent to 4,818.

But firms issued $3.2bn of contingent capital bonds, also known as co-cos, in the period, making it the second-busiest quarter on record for this type of debt. Swiss Re entered the market with a $750m issue.