M&A in the Doldrums? - Not So Fast (And Here's What Paul Weiss Has to Say)

 "Megadeals have come roaring back as ambitious chief executives plot blockbuster acquisitions that would transform their industries, even as overall M&A volumes remain down compared to last year’s record pace." - Bloomberg, May 23, 2022.

THE BIG DEALS

Those range from Broadcom's chase after VMware (valued at about $50 billion) to Microsoft's proposed takeover of ActiveVision Blizzard (valued at $69 billion).

The smart money associated with M&A is looking at the value of the deals, not the literal count. Wall Street law firm Paul Weiss, which recently handled the MGM sale to Amazon, has been documenting that dollar-amount story. 

M&A DECLINE AS CLICKBAIT

No, the Paul Weiss version of the story is not the one media outlets typically tell.

The familiar narrative is doom and gloom. There are clickbait warnings about how the decline in M&A will trigger layoffs in professional services. How juicy: All those high-paid bankers kicked out into the cold. 

As the media blasted: March 2022 ended with the usual disappointing news about global and US deal activity.

For example, the Financial Times article, published the last day of March, was typical in reporting on the sustained decline:

“Global dealmaking fell to its lowest level since the start of the coronavirus pandemic as surging inflation, tougher regulation and the war in Ukraine led to a slowdown in what had been a record period of mergers and acquisitions.”

Another development which has gotten attention has been this: With the Senate approval of Alvaro Bedoya, the FTC now has a progressive majority. That could empower FTC Chairperson Lina Kahn to be more aggressive in antitrust scrutiny of proposed deals.

But, as Paul Weiss connected some dots others didn't notice April did blow in some fascinating data. 

PAUL WEISS DOCUMENTS SPRING DEALMAKING PATTERNS

In its official report on M&A activity, law firm Paul Weiss presents recent highlights. As a Wall Street law firm, Paul Weiss knows how the direction of dealmaking directly affects financial firms. Here are the developments of most interest:

Positive Trends

• Yes, since March, the deal count continued to decline. That had been by 14%. However, in April for the first time in 2022, there had been increases in total deal value. Actually, aggregate deal value increased by 33% in the US and 39% globally in April versus March.

• In the US, both strategic and sponsor deals followed the broader decline trend - 18% and 4%, respectively - according to count. However, they increased in total deal value - 45% and 20%, respectively.

• As for the global picture, sponsor deals more than doubled in aggregate value, increasing by 105%. But strategic deals only had an uptick of 1%.

More of the Same

Simultaneously, US crossborder activity did decline in April. Both inbound and outbound deal count decreased by 17% and 5%, respectively. In terms of value there was a decrease for both – 14% and 30%, respectively.

THE STORY OF "WHO'S GOT THE WORK"

After presenting those highlights in its Client Memorandum, Paul Weiss also provides a comprehensive update of global and US dealmaking. In addition, the report lists the law firm experts available to provide insight and guidance. M&A, both transactional and litigation, is a lucrative Paul Weiss practice.

Brad Karp has been chairperson of Paul Weiss since 2008. His core competence has been showcased in financial, as in how he represented Citigroup. SuperLawyers provides those details.

During the carnage of 2009, his firm did not have to lay off. Paul Weiss was among the firms touted as "Who's Got the Work." Back then in 2009, the American Bar Association documented 10,000 lawyers had been terminated in Reductions-in-Force. 

Connect with Editor-in-Chief Jane Genova at janegenova374@gmail.com. Now and then she does freelance communications assignments for professional services firms such as Paul Weiss.