Legal Market: M&A Sees Big Drop Off in 2012
Reuters is reporting some somewhat bleak news for the global legal services market, as its latest survey shows that M&A fell 25 percent worldwide in the first half of the year. Nor does the report seem to provide a lot of optimism for the rest of the year, with the possible exception of some Latin American markets:
“Announced deals totaled slightly more than $1 trillion globally through June 19, down from $1.33 trillion over the same period last year, according to preliminary Thomson Reuters data.
The drop in dealmaking is bad news for banks already contending with a financial crisis in Europe, worries about growth in Asia and a U.S. economy that has taken a turn for the worse in recent months.
Goldman Sachs (GS.N) was the top M&A adviser worldwide, and Morgan Stanley (MS.N) took the second spot for the first half. The two banks held the same spots in the league table in the first half of 2011.
Bankers said they expect three more slow months, a shift from the rebound they predicted after seeing weak first quarter M&A volumes.
“There is no obvious catalyst for a fast rebound in M&A. The trend is for slow growth, with weekly volumes gradually increasing,” said Henrik Aslaksen, global head of M&A and head of corporate finance, EMEA at Deutsche Bank.
It’s an odd time for a slowdown. Stockpiles of cash on balance sheets and a recent pullback in market values would normally be seen as creating a buying opportunity. But bankers say executives are staying cautious.”
However, while the U.S., Europe and Asia were down 44, 7 and 23 percent respectively, there may be pockets of improving activity in Latin America:
“Mergers and acquisitions activity in Brazil is likely to gain steam by year’s end when the benefits of measures to revive growth will be more visible for companies and private equity firms seeking takeovers in Latin America’s largest economy.”
With China becoming a more important business partner with Latin American governments and corporations, there could be some follow on activity that will boost a sagging Asian market.
Thoughts?
Meanwhile, there are still M&A roles all across Asia, so visit Law Alliance to see what’s on offer.
