Noting that the deals market has experienced “something of a ‘death rattle,'” MergerMarket reports that the volume of global M&A work has dropped substantially at the largest global firms.
Data released Thursday shows that U.K. and U.S. firms touched a third fewer M&A deals in the first quarter of 2008 than a year earlier.
At several top firms, including the high rankers in The American Lawyer’s 2008 Corporate Scorecard, M&A dropped by half as compared to the first quarter of 2007: Latham & Watkins went from 81 to 41 deals; Skadden from 69 to 32; and Sullivan & Cromwell from 44 to 26. Wachtell, which ranked second in U.S. M&A last year, according to the Corporate Scorecard, did not even make MergerMarket’s global top 20.
Not only were firms signing on fewer clients, but the value of the work was less: Only two deals on the list topped $100 billion. Each of the remaining deals were valued at no more than $19 billion.
The $100 billion spin-off of Philip Morris International Inc. announced in January skewed U.S.–sided deal counsel listings ranked by value, lifting some unlikely firms—Hunton & Williams, Sutherland Asbill & Brennan, and McCarthy Tetrault—over their Wall Street competitors. If the Philip Morris deal is excluded, the same Wall Street firms that dominated the tables last year lead the current ranking.
The current credit freeze took the heaviest toll among the U.S. firms on global buyouts. While seven of the ten largest global deals in the first half of 2007 were leveraged buyouts, none was in the top ten this last quarter. Simpson Thacher & Bartlett, longtime counsel to KKR, was the sole U.S. firm among the top five in value of global buyouts, with just $5.6 billion in deals. Linklaters and Lovells took second and third in deal value, up from twenty-third and forty-third a year ago, respectively.