Global M&A activity smashed through the $5tr barrier for the first time on record as companies rush to make deals while interest rates remain low.

That $5tr milestone is 40% more than the value of transactions recorded in the whole of 2020 and almost a fifth more than the previous annual record of $4.2tr hit in 2015, according to Refinitiv data. The number of deals is also the highest since records began in 1980, currently standing at more than 52,000 – 22% more than during the same period of 2020. The vast bulk of those deals have been in the US, with US targets accounting for 45% of global activity. That dwarfed China – the second most active jurisdiction – which accounted for 9% of activity.

Given that large share of US deals, US firms dominate Refinitiv’s top 20 M&A legal advisors league table, with Sullivan & Cromwell leading the pack having worked on 198 deals worth $551bn, just short of an 11% market share. Latham & Watkins ranked second, advising on 710 deals worth $504bn, or a 10th of the market, while Kirkland & Ellis ranked third, advising on 789 deals worth $498bn. Davis Polk & Wardwell and White & Case completed the top five, working on 207 and 411 deals worth $474bn and $451bn respectively.

Technology is the leading sector globally for M&A activity, accounting for roughly a fifth of overall deal value ($989bn) – a record high, and 94% more than the value of all tech acquisitions agreed last year.

Private equity deals also accounted for a fifth of overall deal value, 81% more than 2020 levels and 53% more than the previous annual record of $663bn hit in 2007 in the run up to the global financial crisis.

The number of mega deals – transactions valued at $5bn or more – currently stands at 154, another record. That compares to 110 during the whole of 2020. The combined value of those 154 deals is more than $1.7tr – the highest level since 2015.

Simpson Thacher & Bartlett, Skadden Arps Slate Meagher & Flom, Wachtell Lipton Rosen & Katz, Cravath Swaine & Moore and Paul Weiss completed the global top 10 legal advisor league table. Freshfields Bruckhaus Deringer was 11th – the highest non-US firm in the rankings and one of three to make the top 20, the others being Herbert Smith Freehills (12th) and Allen & Overy (16th).

Record deal activity has helped fuel a salary war in the US, London and other legal centres as firms battle to hold on to their associates. A recent survey by Thomson Reuters and Georgetown Law’s Center on Ethics and the Legal Profession found that more than half of firms (51%) are now viewing acquiring and retaining talent as a high risk to future profitability.

Source: Refinitiv