07 Jul 2020

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

The Charging Bull statue in New York's financial district

The Charging Bull near Wall Street: US deal activity has been hammered by Covid-19 Shutterstock

The coronavirus pandemic left US M&A advisors enduring a brutal first half of the year as deal activity declined to lower levels than the 2008 financial crisis, according to a Mergermarket report.

The number of deals fell to 2139 in the first six months of the year, down from 3174 in the same period in 2019, while the value of those deals fell by 72% to $275bn, data from Mergermarket’s 1H20 M&A report showed.

All of the top five firms in Mergermarket’s US advisory league table by deal count and by deal value saw the number of deals they advised on and the value of those deals shrink between January and the end of June.

Philip Segal, head analyst for the Americas at Mergermarket, said: “As site visits and in-person meetings were put off between March and April, M&A markets faced logistical hurdles slowing down processes. As a result, deal activity declined to levels lower than that of the 2008 global financial crisis. Despite the bleak environment in which dealmakers have been operating, M&A markets appear to be thawing, with the technology sector showing early indications of a rebound.”

Wachtell Lipton Rosen & Katz remained top of the US league table by deal value, despite seeing the value of the deals it worked on tumble by 73% to $120bn. Kirkland & Ellis remained second, having seen the value of its deals also shrink by 73% to $94bn. Latham & Watkins moved up to third from 13th, working on $66bn-worth of deals — almost 64% lower than in the first six months of 2019.

Davis Polk & Wardwell slipped one place to fourth, having seen the value of its deals drop by 80% to $64bn. Skadden Arps Slate Meagher & Flom climbed one spot to fifth, also working on $64bn-worth of deals.

Meantime, Kirkland & Ellis maintained its number one position by deal count, despite working on 130 fewer deals than in 2019. The 180 deals it worked on put it comfortably clear of Latham & Watkins in second place, which worked on 138. That was 28 fewer than last year, but enough for it to rise in the rankings from fourth in 2019. Goodwin Procter was a non-mover in third, working on 115 deals—60 fewer than last year. 

Segal added: “As markets slowly come back to life over the coming months, deal activity can be expected to remain subdued. While the current level of uncertainty is enough to give dealmakers pause, corporate and private equity buyers have shown a willingness to pursue deals.”

Mergermarket: US Deals in H1 2020 by Value
2020 2919 Firm Value ($bn) Deals
1 1 Wachtell Lipton Rosen & Katz 119.9 35
2 2 Kirkland & Ellis 93.9 180
3 13 Latham & Watkins 65.6 138
4 3 Davis Polk & Wardwell 64 51
5 6 Skadden Arps Slate Meagher & Flom 63.6 52
6 5 Simpson Thacher & Bartlett 60.2 46
7 4 Sullivan & Cromwell 56 43
8 35 Willkie Farr & Gallagher 54.9 60
9 21 Freshfields Bruckhaus Deringer 53.4 28
10 14 White & Case 50.7 50

Mergermarket: US Deals in H1 by Volume
2020 2019 Firm Value ($bn) Deals
1 1 Kirkland & Ellis                                     93.9 180
2 4 Latham & Watkins 65.6 138
3 3 Goodwin Proctor 25.1 115
4 7 Ropes & Gray 29.4 94
5 2 DLA Piper 11.7 93
6 14 Sidley Austin 25.8 92
7 5 Jones Day 16.7 88
8 12 Morgan Lewis & Bockius 11.4 75
9 9 Wilson Sonsini Goodrich & Rosati 42.1 74
10 18 McDermott Will & Emery 5.2 63


Further reading:

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

Asia Pacific region least impacted by coronavirus-fuelled global M&A slowdown — Indian law firms dominate top echelons of Mergermarket's APAC M&A advisory league tables

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

Q1 global M&A suffers sharp fall as Covid-19 bites

Wachtell tops US M&A advisory rankings as Covid-19 pandemic halves Q1 dealmaking

Political uncertainty weighs on Latin America M&A activity in first quarter

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

Wachtell, Sullivan and Kirkland top global M&A ranking after a near-record year for mega deals