CORPORATE SCORECARD 2011

Mergers and Acquisitions: Signs of Spring

, The American Lawyer

Last year marked the start of what looks to be a strong recovery for U.S. M&A. Thanks to a sustained pickup in the last six months of 2010, when the wheels of corporate America really started to turn, the aggregate value of American M&A deals hit $722.9 billion--a 4 percent increase from 2009.

Overall deal volume was also up, jumping almost 30 percent, to 3,496 transactions, according to new Corporate Scorecard data provider mergermarket. (Last year we published data from Thomson Reuters.)

"People are starting to spend," says Bingham McCutchen chair Jay Zimmerman. "We saw some big strategic deals last year, and that will probably continue or maybe even increase in pace as confidence returns."

The big news is that, having failed to make the top 20 by value in 2009, Sullivan & Cromwell has jumped straight to the top of the M&A adviser rankings. The Wall Street leader handled 58 M&A deals in 2010, with an aggregate value of just over $180 billion--more than $20 billion ahead of its nearest rival, Skadden, Arps, Slate, Meagher & Flom. Still, Skadden won a trophy mandate to advise Qwest Communications International Inc. on its $22.4 billion sale of a 61 percent stake to telephone and Internet service provider CenturyTel Inc.--the year's second-largest U.S. M&A deal. (Corporate powerhouse Wachtell, Lipton, Rosen & Katz acted for the buyer.)

Sullivan took the top M&A title after landing a role on the year's biggest U.S. M&A transaction: advising American International Group, Inc., on its $48 billion sale of a 61 percent stake to the U.S. Department of the Treasury, which was advised by seventh-placed Davis Polk & Wardwell. But while the federal bailout was the largest U.S. M&A deal in almost two years, the general picture in 2010 was one of smaller transactions. According to Jeffrey Gordon, a senior corporate partner at Mayer Brown, which placed sixteenth in the mergermarket table, the scarcity of multibillion-dollar deals in 2010 was due to the continued malaise of the private equity market.

However, private equity actually had a strong fourth quarter, which Zimmerman partly attributes to deals being pushed through ahead of (ultimately dropped) proposals to increase taxes on carried interest. In fact, total M&A activity for Q4 climbed 15 percent, to $235.8 billion--its highest level since the final quarter of 20060--giving partners renewed optimism for the year ahead.

"I think 2011 could be a very good year," says Gordon. "I would characterize myself as bullish, and that's the first time I've said that for two-and-a-half years."

 

CLICK  HERE for the complete Corporate Scorecard 2011 report.

 

Illustration by Eva Vazquez