Mar 28, 2024 - Business

Global dealmaking slows after year-end uptick

Illustration of a percent sign with a down arrow replacing the slash.

Illustration: Shoshana Gordon/Axios

Dealmakers picked up their pace at the end of 2023, but apparently their destination was a rusty vat of molasses.

Driving the news: Global M&A activity fell more than 20% between Q4 2023 and Q1 2024, according to preliminary data from LSEG.

  • The downturn didn't discriminate by geography, with declines in the U.S., Europe, and Asia-Pacific.
  • The only silver lining was a 33% dollar increase over Q1 2023, although that had been the slowest first quarter in a decade.

What's happening: Buyers think prices are too high.

  • Part of this ties to public equities, which keep setting new records. Even if a target is privately held, it's using listed stocks for comps.
  • Interest rates also mattered, particularly in the middle of the quarter when the Fed's appetite for cutting looked a bit wobbly. This can best be seen in private equity deal activity, whose Q1-over-Q1 increase was much more modest at 8%.

The bottom line: First quarters have a habit of coming in soft, but this is still disappointing given January's consensus optimism.

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