Global M&A activity smashes records

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The total value of first quarter Global M&A transactions in 2014 has marked a significant improvement on 2013 M&A activity, according to research released today.

The research showed that the total value of first quarter M&A was US$599.1bn, a 33.2% increase on the first quarter of 2013 ($449.6bn).

This also represented the most active start to the year since 2011, when $613.5bn in M&A first quarter transactions occurred.

The research was revealed in Mergermarket’s M&A trend report: Q1 2014, which also showed that first quarter global M&A activity increased 5.7% on the fourth quarter of 2013.

Commenting on the local M&A market, Herbert Smith Freehills partner Tony Damian told Australasian Lawyer that certain developments augur well for the M&A market going ahead. One is a greater likelihood of deals proceeding beyond the “tyre kicking” stage.

“Deals have a greater chance of actually happening,” he said. “Twelve months ago there was a lot of consideration of deals and a lot of people on boards thinking of deals but translating that into announced and completed deals proved to be tricky. Confidence seems to have returned and people are out there doing things.”

The Mergermarket report also indicated that eight mega-deals, transactions above $10bn, were recorded in the first quarter – the most seen in any quarter since the 13 announced in Q1 2006.

The mega-deals accounted for just over a fourth of the total value of global M&A transactions.

Another important identified trend is an increase in the average deal size. The first quarter of 2014 saw the highest average deal size ($374.4m) since 2009 and this was also a third higher than the average size of 2013 first quarter deals.