Cash-rich firms fuel rise in M&A deals in 2011 despite slowdown at year end

MERGER and takeover activity increased last year compared to 2010 to a global total of $2.81 trillion (£1.8 trillion), despite a fall-off in deals at the year end, data yesterday showed.

Data from Dealogic showed M&A activity rose three per cent in 2011, with more than half of the deals announced in the first half, and less than $1.3 trillion announced in the second half as cautious firms hoarded cash rather than pursue acquisitions.

M&A in Europe performed even better, with 14,887 deals announced, the highest of any year on record, worth a total of $811.5bn.

The UK was the most targeted country for M&A in Europe, with $137.8bn of deals announced, although this was still the worst year for M&A since 1997, and was six per cent down on the volume of deals made in 2010.

In contrast, M&A deals targeting the US hit the highest level seen since 2007, at 10,241. In volume terms, deals worth $1.03 trillion were announced – up 15 per cent on 2010’s level and the best performance since 2008. Emerging markets M&A fell 17 per cent to $742.3bn.

Revenues from M&A advisory work increased eight per cent compared with 2010, to reach $19.2bn, according to Dealogic’s methodology.

Goldman Sachs topped its league of M&A advisers in the global, US, European and Asia Pacific regions – only Nomura knocked it off the top spot in Japan.