Corporate mergers and acquisitions activity - the major source of revenue for most City firms - fell to its lowest level in a decade last year, new research has revealed. 

The Global Mergers and Acquisitions Review by LSEG Data & Analytics reports that the value of M&A deals fell by 17% to $2.9 trillion last year, the slowest full year period for deal making since 2013. Over 55,200 deals were announced during 2023, a decrease of 6% compared on the previous year and a three-year low.

European M&A activity declined more sharply than the global average, falling by 28% on 2022 levels. Worldwide, the number of so-called mega deals - of greater than $10bn in value - fell by 13% while cross-border activity was 12% down. 

The global league table of legal M&A advisers is dominated by US firms, with Kirkland & Ellis, Latham & Watkins and Wachtel Lipton Rosen & Katz in the top three places of announced deals by value. 

Last month the Office for National Statistics revealed that the number of inward mergers and acquisitions involving UK companies dropped to the lowest figure since the onset of the pandemic in the three months to September. 

However in a more upbeat note, the LSEG report detected signs of a bounce-back in the fourth quarter of 2023. In the coming year City firms will be counting on a recovery in M&A activity driven by private equity and the quest for security in scale.

 

This article is now closed for comment.