Mergers and acquisition (M&A) activity across the world fell in the first quarter on the back of volatile markets, trade tensions, Brexit anxiety and stronger economic headwinds, a report said yesterday.
It noted that deal values dropped 15 per cent to US$801.5 billion (S$1.1 trillion) in the three months to March 31 from US$943.5 billion in the same period last year, while transaction numbers plummeted 30 per cent, from 5,085 to 3,558.
"Large cross-border deals, which propelled M&A activity in the past five years, have almost disappeared," said the report from data firm Mergermarket.
Only nine mega deals - those above US$10 billion - have been struck this year, down from 14 in the first quarter of last year.
Only one - Newmont's acquisition of Canada-based Goldcorp for US$12.8 billion - was cross-border. And all but two, the Newmont deal and Saudi Aramco's acquisition of Saudi Basic Industries Corporation for US$70.4 billion, were the result of United States-based firms taking out competitors in their home market.
Total cross-border M&As accounted for 30.8 per cent or US$246.9 billion of global activity in the first quarter, compared with 38 to 40 per cent on average between 2015 and last year.
The report added that outbound M&A from China and Hong Kong was "particularly subdued", reaching US$12.1 billion over 56 deals in the first quarter, its lowest level since the third quarter of 2014.
In Europe, only 17 deals totalling US$2.3 billion were struck by acquirers from China and Hong Kong, the lowest since the fourth quarter of 2013.
The largest deal so far this year is Bristol-Myers Squibb's US$89.5 billion bid for Celgene.
Mergermarket said this shows a continued demand for "transformative buyouts in the pharmaceutical, medical and biotech sector".
In the Asia-Pacific, excluding Japan, M&A activity "nosedived" in the first quarter to 666 deals worth US$119.9 billion amid economic headwinds and the unresolved US-China trade war.
Industrial and chemicals remained the busiest sector in both value and volume in Asia totalling US$21.5 billion in 132 deals, an 11.3 per cent drop in value on last year.
Private equity firm buyouts dropped to 66 deals worth US$8.7 billion, the lowest since the first quarter of 2013.
Despite the first-quarter slowdown, Mergermarket sounded optimistic: "With pockets of consolidation in some particularly hot sectors, vigorous private equity activity and a healthy domestic deal flow in the US should give hope to deal-makers for the rest of 2019."