From WSJ DealJournal, July 31, 2009:
By Stephen Grocer
Every time it seems the U.S. M&A market can’t go any lower, it goes lower. So when will the U.S. M&A market hit bottom?
If we have learned anything in the global financial crisis, it is that calling the market is a quick way to look foolish. Still, one thing is clear from the July data: The M&A market remains in a slump. The total value of announced mergers and acquisitions of U.S. targets was just $23 billion in July. That is off 41% from June, 85% from July 2008 and back to the lows of November and December, when the financial world seemed to be falling apart.
July’s deal volume figures highlight the shrinking role of the U.S. in the global M&A marketplace. For the second consecutive month, U.S. M&A activity was significantly lower than that of both Europe and Asia, with $56.1 billion and $42 billion, respectively. Global M&A volume fell to $137 million from $258 billion in June and $401 billion last July, according to Dealogic.
That is quite a comedown. Historically, the U.S. has been the leading M&A market. A decade ago U.S. deal volume was 16% higher than the combined volume of Europe and Asia and accounted for nearly 50% of all deal activity. But beginning in the M&A boom of 2006 and 2007, Europe began topping the U.S., while other regions began to catch up. In July, U.S. deal volume accounted for just 17% of global activity, according to Dealogic.
One interesting point of note with August marking what is widely considered the two-year anniversary of the beginning of the credit crisis: In the 24 months since, U.S. deal volume has topped $100 billion just four times, according to Dealogic. In the 19 months before that, it came in above $100 billion 11 times.