Yesterday’s Morning Docket noted that White & Case was on top of Bloomberg’s global deal charts. In another, more detailed M&A ranking, White & Case remains at the top of the pack, but what’s striking are the internals — White & Case is the only leading firm having a better year than in 2015.
If anyone would like to panic that the recent round of “MoneyLaw” raises mark the beginning of financial apocalypse, now would be the time.
Mergermarket just came out with its Global M&A Roundup for Q1 through Q3 of 2016, and the comparison of global deal value from the comparable period in 2015 for the top 20 firms is frighteningly bleak.
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White & Case closed $424.4B in deals during the first three quarters, marking a 5.5 percent improvement in deal value over the same stretch last year. But then you look at the competition. Davis Polk — down almost 40 percent; SullCrom — down 58.7 percent; Wachtell — down 53.6 percent; and Cravath — down 65.5 percent. MoFo, clocking in at 20th in global deal value, did the second best compared to last year recording only a 35.4 percent decline in deal value. Latham, last year’s number 3 in global M&A across 3 quarters, is off just shy of 90 percent.
To-date in 2016, 12,283 deals worth US$ 2.2tn represents a 20.2% value decrease compared to the same period in 2015…
There is some good news to be had because activity is up the last two quarters suggesting a positive trend, but the overarching drop-off from the previous year can’t inspire confidence.
But if there’s hope for M&A, it has to hinge on Donald Trump’s defeat, because it’s all about China:
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Acquisitive Chinese buyers remain a key driver of M&A globally, with 201 deals worth US$ 141.2bn so far this year targeting rms outside of the Asia-Paci c region overtaking all annual deal values and volumes on Mergermarket record (since 2001). Chinese dealmakers are the dominant force behind Asia-Paci c’s outbound activity (434 deals, US$ 162.9bn), accounting for a record 84.7% of deal value, and 46.3% of deal count. The most targeted sectors by Chinese dealmakers were Industrials & Chemicals (64 deals, US$ 68.5bn) and Technology (29 deals, US$ 24.0bn), which recorded year-on-year value increases of 498.4% and 297.2%, respectively.
That said, the US remained the top market for M&A, with 43.8 percent of the global share, highlighted by Bayer’s Monsanto bid and a huge dose of Energy, Mining & Utilities deals.
Other highlights from the detailed report:
* Japan thinks defense wins championships: “[D]omestic activity now comprises a 90.5% share of total Japanese M&A.”
* Europe’s in a holding pattern: “European M&A is facing challenges due a wave of macro-economic uncertainty sweeping across the continent, with Brexit, the upcoming Italian referendum, French and German national elections all affecting dealmakers’ confidence.”
* Rebuilding trust takes time: “Central & South America is exhibiting signs of a modest recovery after the sharp downturn that began in 2015 against a backdrop of falling commodity prices and deepening corruption scandals.”
* The new frontier: “The Middle East & Africa is the fastest growing region in terms of M&A deal value year-on-year, with 288 deals worth US$ 65.3bn representing a 146.8% rise compared to the same period in 2015 (US$ 26.5bn, 366 deals), and overtaking all annual values since 2007 (US$ 88.2bn)” — and who’s driving this boom? China.
Check out the whole report here.
Joe Patrice is an editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news.