Global M&A activity rebounded strongly in the third quarter after a miserable first half of the year that had seen dealmaking stall amid the coronavirus pandemic.

The value of deals in the third quarter more than doubled to $891bn from $372bn in the previous quarter, according to Mergermarket’s 3Q20 M&A Report. That total was 32% higher than the same period last year. The surge in deals was driven by an uptick in large deals—those valued at $5bn or higher—with 32 transactions crossing that threshold, Mergermarket data show.

Latham & Watkins topped the global M&A advisory rankings, working on 315 deals worth $303bn over the first nine months of the year—ranking first in the US and Europe. It held a comfortable lead over second place Freshfields Bruckhaus Deringer, which worked on 111 deals worth $219bn. Sullivan & Cromwell was third with 89 deals worth $218bn.

Demonstrating the depth of its M&A practice, Latham came in third in the global ranking by deal volume behind fellow global giant Kirkland & Ellis, which came first having worked on 336 deals worth $197bn, and second-placed DLA Piper, which advised on 323 transactions valued at a total of $28bn.

Despite the bumper third-quarter activity, year-to-date deal values were still down sharply on the same period in 2019, clocking in at $1.86tr compared to $2.58tr in the first nine months of last year. The number of deals have fallen by almost a third to 3,494 from 5,106 in 2019. 

Mark Druskoff, data-driven coordinator at Mergermarket, said: “The anaemic number of deals could be a sign that although dealmakers have forged ahead, plenty of uncertainty remains in the global economy. Pandemic infection numbers have declined in some regions while surging in others. [And] Brexit looms large on the horizon in Europe, which could have a deleterious impact on M&A.”

The US accounted for almost half of the deal value seen in the third quarter following a sharp drop off in US transactions in the second quarter. But Druskoff warns that the US election and continued social unrest create a number of question marks, including potential changes in tax laws that could spur some business owners to pursue sales processes.

The firms completing the top five in the global M&A advisory rankings by value after the first nine months of the year were fourth place Wachtell Lipton Rosen & Katz—which led the rankings at this stage in 2019—working this year on 46 deals worth $213bn and Kirkland & Ellis, which came in fifth, down from second place at the same point in 2019.

In terms of deal volume, White & Case is having a strong year relative to its rivals, climbing to fourth place from sixth in 2019, having advised on 228 deals valued at $192.9bn.  In fifth - the same position it achieved in 2019 - was Goodwin Procter, having advised on 214 deals worth a total of $46.9bn. Last week, the firm strengthened its London offering with the hire of a five-partner private equity team from Sidley Austin.

Further reading on deals

Global M&A slowest since financial crisis as deal appetite slumps amid Covid-19 pandemic — Latham & Watkins replaces Wachtell Lipton Rosen & Katz at top of global M&A advisory league table for first half of 2020

Latin America Covid-19 woes see region's M&A activity plunge to lowest on record — Deal value in first six months of the year falls below previous record low in 2003, Mergermarket report shows

Freshfields and DLA Piper top European H1 M&A tables for value and volume as deal activity plunges — Allen & Overy and Herbert Smith Freehills jump up rankings as Slaughter and May drops out of top 20

Covid-19 sees US M&A activity suffer bigger decline than during financial crisis — Wachtell Lipton and Kirkland & Ellis cling on to top league table positions despite slowdown

Asia Pacific M&A slowdown fails to derail region's top deal advisers