With the emerging markets continuing to dominate the expansion strategies of many City and international firms, the short term picture remains mixed as the value of M&A activity in the region bucked a global trend by dropping to $125.7bn during the first quarter of 2014, down by 4.7% from $131.9bn compared with the first quarter of 2013.
The total number of M&A transactions in the emerging markets in Q1 was down to 2,583, a drop of 17.9% from the same period last year, according to the latest M&A legal review from Thomson Reuters.
Taking a longer view, activity levels have since failed to replicate a high of $193.6bn achieved in the first quarter of 2010, which slumped to $87.9bn during the same period in 2009.
So far this year, the majority of M&A activity has been in China, which boasts 836 transactions worth $50.1bn. While Brazil generated the second highest volume, it fell far behind China’s tally on 154 deals at $13bn.
In terms of sectors, real estate accounted for 18% of all M&A volumes and $22.2bn in deals, with energy and power close behind with 17% of deals totalling $21.3bn.
The M&A rankings show that King & Wood Mallesons topped the list with a total deal value of $10.5bn across three deals, all of which involved M&A activity in China. Skadden, Arps, Slate, Meagher & Flom fell in second place with a total deal value of $7.5bn across eleven announced deals followed by Davis Polk & Wardwell with $6.7bn over ten deals.
This comes as the value of worldwide M&A deals increased by 52% to $756.1bn during the first quarter of 2014, compared to the same period last year. On the other hand, the number of total deals was the slowest for M&A since 2004 with 8,237 deals announced during the first quarter of 2014, a 10% decline compared with a year ago.
For worldwide M&A deals, Skadden Arps emerged as the highest ranking firm by value after advising on 49 deals worth slightly over $153bn. Simpson Thacher & Bartlett was second with a total of $123.7bn across 36 deals, with White & Case ranked third totalling a value of $114.3bn across 40 deals.