Magazine article Global Finance

M&A Deals Accelerated in First Quarter

Magazine article Global Finance

M&A Deals Accelerated in First Quarter

Article excerpt

Mergers and acquisitions rebounded in 2010, and the momentum appears to be carrying over into this year. The first three months of 2011 constituted the strongest quarter for mergers and acquisitions globally since the second quarter of 2008, according to Thomson Reuters. Some $800 billion of deals were announced in the first quarter, an increase of 55% from the same period a year earlier.

Morgan Stanley was the number-one financial adviser on worldwide deals announced in the first quarter. The investment bank advised on 81 deals valued at $215 billion, giving it a market share of 26.8%. j.P. Morgan was second, with 77 deals valued at $195 billion. Rounding out the top five financial advisers, as ranked by Thomson Reuters, were Citi, Goldman Sachs and Bank of America Merrill Lynch, in that order.

Morgan Stanley benefited from its role as lead underwriter for the conversion of the US Treasury s $59 billion of American International Group's preferred stock into common shares, which was the largest deal in the first quarter of this year. Morgan Stanley also advised Deutsche Telekom on its $39 billion sale of T-Mobile USA to AT&T, the second largest deal announced in the first quarter.

Energy, Power Deals Lead

The energy and power sector was the most active arena for M&A transactions in the latest quarter, led by the $26 billion proposed merger of North Carolina-based electric power producers Duke Energy, based in Charlotte, and Progress Energy, based in Raleigh.

BP was involved in two of the largest deals in the energy sector. The UK-based oil company agreed to acquire 23 oü production-sharing contracts from India-based conglomerate Reliance Industries for $9 billion. BP also agreed to invest $7.9 billion in an alliance with Russian state-owned oil company, Rosneft. The Russian deal was looking more uncertain as Global Finance went to press, however, after Rosneft announced it would probably have to replace BP with another partner in its venture to develop Arctic oil fields. …

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