Global mergers and acquisitions fell by a third in the first quarter to $444 billion, as the economic crisis deterred deal making, reports Reuters.
Despite the bank bailouts and two U.S. drug industry tie-ups, M&A had its slowest first quarter in six years, according to Thomson Reuters data.
Bankers have credited the downturn with the tough economic conditions and do not foresee improvements until credit markets become more welcoming, shares stabilized, and an overall improvement in the economy.
“There’s a lack of confidence in valuations, and a lack of credit,” Ian Hart at Citigroup told Reuters, which advised clients including Pfizer, Lloyds, Essent NV, and the Treasury on several of the year’s biggest deals.
“Executives are very cautious and are focussed on seeing their businesses make it through the downturn,” said Hart, Citi’s co-head of European M&A.
“There will come a time when people feel it’s the right time to move but they don’t feel any need to hurry.”
David Livingstone at Credit Suisse, which ranked top for European M&A, said M&A remained highly dependent on the economic outlook.
“There’s less overall confidence in making strategic moves, and continued dislocation in credit markets. We’d anticipate this situation will broadly continue through the rest of the year,” he said.