In the first nine months of 2024, the global mergers and acquisitions (M&A) landscape has witnessed a significant shift, characterized by fewer but larger deals. According to data released by the London Stock Exchange Group (LSEG), one of the world's oldest stock exchanges founded in 1571, the total value of announced M&A deals reached $2.3 trillion, marking a 16% increase compared to the same period last year.
Despite this surge in value, the number of M&A transactions has hit an eight-year low, with just over 35,500 deals announced through the third quarter of 2024. This represents a 20% decrease from the previous year, highlighting a trend towards more substantial, high-value transactions in the current market.
Leading U.S. and international law firms continue to play a crucial role in these large-scale corporate deals. Kirkland & Ellis, a Chicago-founded firm established in 1909, maintained its position as the top principal adviser in LSEG's rankings by deal value. The firm advised on 556 global announced deals worth $295 billion, showcasing its dominance in the M&A advisory space.
Skadden, Arps, Slate, Meagher & Flom, founded in 1948 and renowned for its M&A expertise, edged out Kirkland as the top adviser on global announced deals by value among firms advising any party in a transaction. Skadden worked on 159 deals totaling $331 billion, including withdrawn or canceled deals.
One of the year's most significant transactions saw these two legal powerhouses on opposite sides. Mars, the privately held American company known for confectionery and pet food, acquired Kellanova (formerly Kellogg Company) for $36 billion. Skadden advised Mars, while Kirkland represented Kellanova in this landmark deal.
Goodwin Procter, a Boston-founded firm established in 1912 with a strong focus on technology and life sciences industries, secured the top spot as principal adviser by number of deals. The firm worked on 603 deals valued at $91 billion, narrowly surpassing Kirkland & Ellis in terms of volume.
Latham & Watkins, founded in 1934 in Los Angeles, ranked second by deal value and third by volume, advising on 458 global announced deals worth $273 billion. The firm's notable transactions included advising SRS Distribution in its acquisition by Home Depot, the largest home improvement retailer in the United States, and Skydance Media on its acquisition of Paramount Global, one of Hollywood's oldest film studios with roots tracing back to 1927.
"We're still in a market that has some headwinds. The number of reported deals is not really representative of the level of activity we're seeing. For every deal that's announced, there's quite a few deals happening in the background."
Market experts point to several factors influencing the current M&A landscape. The U.S. Federal Reserve's recent interest rate cut in September 2024 and ongoing scrutiny of deals by government agencies like the Department of Justice and Federal Trade Commission continue to shape the market. Additionally, the upcoming U.S. presidential elections in November 2024 may lead to a temporary slowdown in the fourth quarter as companies postpone major decisions.
Despite these challenges, law firm partners remain optimistic about future M&A prospects. Michael Weissner from Kirkland & Ellis noted a robust M&A pipeline, while cautioning about potential impacts from the election and geopolitical events. David Barkus, co-lead of Holland & Knight's corporate, M&A and securities practice, anticipates increased deal activity regardless of the election outcome.
As the M&A market navigates through these complex dynamics, it's clear that while the number of transactions may be lower, the strategic importance and financial impact of each deal have grown significantly. The trend towards fewer but larger transactions reflects a cautious yet ambitious approach in the corporate world, with top law firms playing a crucial role in shaping the future of global business consolidation.