Despite global M&A activity falling to 10 year lows during 2023, U.S. law firms kept busy with new deals announced during the fourth quarter of the year. Tightening economic policy and slowing economic growth cooled companies’ appetites for acquisitions– but U.S. deal activity helped buoy global M&A with continued activity. DealPulse’s M&A database tracks publicly-announced deals over $25 million in value, harnessing both AI and attorneys to digest the granular deal points of each transaction to allow for comparisons across industries, specific deal terms, and both legal and financial advisors.
“While interest rates, uncertainty and other factors negatively impacted deal activity in 2023,” according to Skadden, “we saw a steady flow of carve-outs, spin-offs and joint ventures that offered creative ways to achieve strategic goals.” The industrial and healthcare industries were especially active this quarter.
AbbVie Inc.’s two megadeals this quarter – acquiring ImmunoGen for $10.1 billion and Cerevel Therapeutics for $8.7 billion – helped drive deal activity with the two top spots on the Q4 league table. The company helped spread the wealth, using a different firm for each deal.
Advising AbbVie on the Cerevel merger, Kirkland Ellis took the top spot this quarter. While Kirkland fell off the league table last quarter, it came roaring back to #1. The firm was incredibly active over the past three months and advised on 8 announced deals. They had their hands on almost all of the top deals: they advised Six Flags on its $8 billion merger with Cedar Fair, Bristol-Myers Squibb on its $4.8 billion acquisition of Mirati Therapeutics, and Vista Equity Partners on its $4 billion takeover of EngageSmart, Inc.
No strangers to the list, Wachtell took the second place this quarter after taking the top spot in Q3. The M&A juggernaut advised on just two applicable deals announced this quarter, but they were massive ones: they advised AbbVie on its takeover of ImmunoGen as well as Masonite International Corporation on its $3 billion takeover of PGT Innovations.
Ropes & Gray has been absent from the top 5 for a while but has come back to take the #3 spot. It was propelled largely by the firm’s representation of ImmunoGen in the AbbVie Inc. deal.
Davis Polk advised on just two applicable deals this quarter, but their representation of Exxon Mobil Corporation on its $6.45 billion acquisition of Pioneer Natural Resources and PGT Innovations in the Masonite deal was enough to finish fourth. Finally, Latham is almost always in the top 5, finishing #1 in Q4 and #4 in Q3. The firm held onto the fifth spot, advising on 4 large deals announced this quarter.
Deals in the industrials and healthcare spaces accounted for nearly half (43%) of the deal count this quarter, with business services making up 13.64%. Most notably, technology deals evaporated during the last months of 2023.
Analysts predict that if inflation, economic fears, and interest rates recede during the new year, “the pressure on companies to look for growth opportunities and keep up with the speed of innovation (not to mention the need for financial sponsors to deploy capital) could result in a rebound in deal activity in 2024.” Until then, ”the market will continue to provide attractive opportunities for thoughtful, resilient and creative deal structuring and execution.” As always, creative dealmaking will persist.