Global M&A nosedives in Q1

Global merger and acquisition activity dropped in the first quarter, as both the number and value of deals declined, according to new data from Refinitiv.

Worldwide M&A activity dropped by 28% in the first quarter, compared with the same quarter in 2019. The total deal activity for Q1 was US$697.6 billion.

The number of deals also dropped by 14% in the quarter, which Refinitiv said marks a six-year low.

For Canada, the number of deals was down by 15%, in line with the global trend, but deal value plunged by 68% from the previous year.

In the U.S., M&A activity was slashed in half, falling to US$252.9 billion in Q1.

Deal activity was also down in Asia, but M&A actually increased in Europe, jumping to US$232.2 billion.

Alongside the decline in deal activity, M&A fees for global investment bankers were also down by an estimated 28% in Q1, yet overall investment banking fees were down by just 10%, as equity and bond underwriting fees rose by 10% and 7%, respectively, in the quarter.

In fact, bond underwriting fees reached a record US$9.3 billion in the quarter, Refinitiv noted, which is the highest level since it began tracking the metric in 2000.

In particular, January was a record month for debt underwriting, as US$3.9 billion worth of fees were generated.

This, in turn, pushed global investment banking fees to a record US$8.8 billion in January, the firm reported.

Since, then, global fees declined by 12% in February, and Refinitiv estimated that March will represent the lowest monthly total for fees since August 2013.

In M&A, Goldman Sachs remains the top firm globally, but JP Morgan ranks first in the Q1 for investment banking fees overall.

BofA Securities sits second, and Goldman is third in the global league tables.

RBC Capital Markets is the only Canadian firm in the global top 10 for investment banking fees. It ranks ninth place overall.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.