Global mergers and acquisitions (M&A) activity dopped 28% in Q1 to its lowest level since 2016 as the devastating economic results of the coronavirus pandemic took hold in March, compounding a slow start to the year for dealmakers.
Deal activity in the U.S. plunged by half to $252 billion in the first three months from a year in the past, driving global volumes down to $698 billion from $964 billion in Q1 of 2019, based on Refinitiv data. Asia volumes plunged 17% year-on-year to $142.9 billion.
Europe noticed its deal volume over double to $232 billion because of a handful of mega-deals clinched weeks before the coronavirus started battering the continent’s economies.
With massive swathes of the globe shut down, the M&A pipeline remains patchy and prone to be dominated by rescue deals, shake-up and nationalizations as governments and central banks attempt to shore the economy up.
Russia utilized its National Wealth Fund (NWF) to finance this quarter’s greatest deal – the $39 billion purchase of the nation’s largest financial institution Sberbank.
Other massive deals included insurance broker Aon’s $30 billion all-stock takeovers of competitor Willis Towers Watson and the $18 billion private equity-led buyouts of Thyssenkrupp’s elevators unit.
The U.S. Federal Reserve and its global equivalents moved aggressively this month to launch emergency rate cuts aimed at restoring investor confidence.