Executive Summary/Highlights:

• Global M&A volume in Q1 was US$546 billion, up 10% from the same quarter last year but down from last year’s strong finish in the fourth quarter.
• Q1 saw a number of transformative transactions across the globe, including four transactions exceeding US$15 billion in value (Berkshire Hathaway/3G Capital – Heinz, Michael Dell/Silver Lake Partners – Dell, Liberty Global – Virgin Media, and Comcast – NBC Universal Media).
• The United States had an unusually strong quarter compared to other regions, with eight of the 10 largest deals and over 50% of global M&A volume.
• Cross-border deal activity fell, accounting for just 25% of global M&A volume as compared to 37% of 2012 volume.
• Energy & Power continued to produce the most M&A volume of any sector, but barely edged out the High Technology and Real Estate sectors, each of which had relatively strong quarters.  Interestingly,  none of the five largest deals of Q1 were Energy & Power deals.
• Notwithstanding the decline in M&A volume from Q4 2012, growing stability in US markets, rising corporate confidence (together with strong corporate earnings and cash stockpiles), and the continued availability of cheap financing for certain borrowers should continue to fuel global deal activity, despite uncertainty in Europe, exemplified by the quarter’s crisis in Cyprus, and the slowing growth of markets such as China, India and Brazil.
• Financial sponsors have reemerged, playing a leading role in some of the largest transactions.  In addition to buyouts and traditional strategic M&A, spinoffs, divestitures, and other corporate restructurings continue to present attractive opportunities for many companies.

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