07 April 2020

Wachtell tops US M&A advisory rankings as Covid-19 pandemic halves Q1 dealmaking

Wall Street

Wall Street last month as New York went into lockdown

Deal value collapses 57% in the first quarter as wary buyers put transactions on hold

Wachtell Lipton Rosen & Katz topped the US M&A market’s advisory rankings in the first quarter amid a sharp slowdown in deal activity caused by uncertainty around the coronavirus pandemic.

US deal value slumped to $206bn in the three months to the end of March, 57% lower than the same period a year earlier, according to a Mergermarket report

That extended a broader slowdown in US dealmaking, with the value of M&A transactions already swooning by 40% between the first and second half of last year.

Wachtell led the US ranking by deal value (see table review), advising on transactions worth a total of $107 bn. Kirkland & Ellis was second with $63bn of deals, followed by Willkie Farr & Gallagher ($51 bn), Skadden Arps Slate Meagher & Flom ($45bn) and UK magic circle firm Freshfields Bruckhaus Deringer ($44 bn).

Wachtell’s no.1 position—up from fifth at this point in the calendar in 2019—was down to a number of big-ticket deals, including advising US mall operator Taubman on a $9.8n merger and joint venture with Simon Property Group. 

The New York deal powerhouse also led the Q1 global rankings, having topped the overall 2019 ranking by value.

Wachtell advised on 24 deals in total, compared to 97 for Kirkland & Ellis, which topped the ranking by deal count.

Latham & Watkins was second by deal count with 72 transactions, followed by Goodwin Procter (54), Jones Day (53) and Sidley Austin (50).

Philip Segal, head analyst for the Americas at Mergermarket, said: “Uncertainty in the global markets, already riled by political and economic tensions in 2019, was exacerbated by the Covid-19 public health emergency. As the virus spread from Asia to Europe and the Americas through the end of 1Q, companies became increasingly apprehensive about making major decisions and M&A activity slowed down.”

Segal reckons M&A activity will decline further this year even if the pandemic is contained quickly given that sales processes have already been delayed or disrupted, while the economic impact of the virus is still unknown. 

He added: “It’s currently difficult to have a positive outlook for the rest of the year… The unpredictable nature of today’s environment is likely to stall M&A markets for the foreseeable future.”

Mergermarket: US Q1 2020 Deals by Value
1Q20 1Q19 Firm Value ($bn) Deals
1 5 Wachtell, Lipton, Rosen & Katz 106.9 24
2 2 Kirkland & Ellis 62.9 97
3 21 Willkie Farr & Gallagher 50.5 32
4 4 Skadden Arps Slate Meagher & Flom 45.2 24
5 31 Freshfields Bruckhaus Deringer 44 15
6 17 Shearman & Sterling 43.9 10
7 8 Sullivan & Cromwell 41.8 30
8 331 King & Spalding 41.2 11
9 12 Latham & Watkins 37.8 72
10 1 Davis Polk & Wardwell 35.7 23

Mergermarket: US Q1 2020 Deals by Volume
1Q20 1Q19 Firm Value ($bn) Deals
1 1 Kirkland & Ellis 62.9 97
2 3 Latham & Watkins 37.8 72
3 2 Goodwin Procter 18.3 54
4 5 Jones Day 8.7 53
5 14 Sidley Austin 19.3 50
6 4 DLA Piper 5.5 46
7 10 Morgan Lewis & Bockius 8.7 44
8 8 Ropes & Gray 19.1 40
9 16 McGuireWoods 4.3 36
10 25 Willkie Farr & Gallagher 50.5 32

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