Global M&A volumes tumbled by a third in Q1: Thomson

LONDON Fri Mar 28, 2008 7:35am EDT

LONDON (Reuters) - Global mergers and acquisitions slumped by almost a third in the first quarter, according to preliminary data from Thomson Financial, as banks reined in borrowing and economic uncertainty weighed on CEO confidence.

Global M&A volumes fell 31 percent to $661 billion in the first quarter of 2008, Thomson said on Friday. Buyout firms led the collapse in deals as their buying power evaporated and they saw a 77 percent fall in acquisitions after 6 years' growth.

The credit crunch has dented banks' confidence in lending to buyout firms, which rely on debt to achieve their returns. Meantime slowing U.S. and European economies and volatile markets are making corporate CEOs reluctant to take large risks.

The numbers come after a record year for M&A in 2007. However the start of the credit crunch last summer had already contributed to global M&A falling by more than a quarter year-on-year in the second half.

Europe remained ahead of the U.S. in terms of deal volumes and also better-weathered the downturn, with M&A falling just 10 percent on the continent, compared with a 53 percent fall-off in the U.S.

Investment bank Goldman Sachs rose by one spot to top the Thomson table of worldwide M&A advisers, followed by Lehman Brothers and Citigroup. Morgan Stanley, which had led the rankings in the same period last year, dropped to number 6.

The top global M&A advisors in the first quarter of 2008 are, in descending order: Goldman Sachs (GS.N), Lehman Brothers LEH.N, Citigroup (C.N), Credit Suisse (CSGN.VX), Deutsche Bank (DBKGn.DE), Morgan Stanley (MS.N), Centerview Partners, JP Morgan (JPM.N), Merrill Lynch MER.N and UBS UBSN.VX.

(Reporting by Mathieu Robbins; editing by Elaine Hardcastle)