A pickup in large transactions boosted M&A volumes in the first quarter, and the big-deal activity has continued in the second quarter.
The first two months of the second quarter saw 25 global M&A deals announced with a transaction value of $5 billion or more. This compares to 22 transactions of that size announced in the entire second quarter of 2017, excluding terminated deals. The most recent quarter saw 39 deal announcements topping $5 billion, up from 20 a year earlier.
With the increase in big deals, the total global value of first-quarter announced M&A transactions jumped 53% year over year to $1.002 trillion even as the number of deals dropped 4.5% to 10,793. A new S&P Global Market Intelligence report highlights the rise in large deals along with other recent M&A and equity capital markets developments.
Click here to read the full Q1'18 M&A and Equity Offerings Market Report.

A volatility spike in the U.S. stock markets during the first quarter negatively impacted equity issuance. U.S. equity capital markets activity slowed in February, the most turbulent month of the quarter based on the Cboe Volatility Index, which measures implied volatility of S&P 500 index options.
In February, U.S. companies completed 86 equity offerings with a total transaction value of $12.70 billion, less than January's 105 deals with $21.08 billion in total transaction value and March's 127 deals with $18.94 billion in total transaction value. For the entire first quarter, the number of U.S. equity offerings fell year over year to 318 from 399 while their total value dropped to $52.73 billion from $60.59 billion.
For much of 2018, U.S. equity issuance volume totals will face a difficult year-over-year comparison because companies rushed to market in 2017 to take advantage of higher equity prices in the wake of the presidential election.

The number of first-quarter U.S. IPOs did increase slightly year over year to 43 from 39 while the total amount raised fell to $10.35 billion from $12.91 billion. Securities and Exchange Commission Chairman Jay Clayton is trying to encourage more IPOs. Under his leadership, the SEC has expanded the types of companies that can submit confidential draft IPO registration statements, and the agency is considering other provisions to ease the process of going public.
An IPO can help companies raise capital and build a brand while establishing a public stock currency. But the current M&A environment might provide investors in private companies with a better path to liquidity.
Many U.S. companies have become more equipped to pursue M&A deals given the influx of capital from U.S. tax reform. And despite the first-quarter market volatility, stock currencies remain strong. Interest rates have increased, but they still are historically low, which supports M&A financing.
But regulatory scrutiny has challenged dealmaking. While President Donald Trump has been business-friendly, his administration has stood in the way of certain large deals and taken some seldom-used approaches to stymie a few transactions.
Trump cited national security concerns when blocking the $1.30 billion sale of Portland, Ore.-based Lattice Semiconductor Corp. to China-backed private equity firm Canyon Bridge Capital Partners LLC. The September 2017 order marked only the fourth time a U.S. president blocked a transaction on national security grounds. In a March 2018 executive order, the president again cited national security concerns when blocking Singapore-based Broadcom Ltd. from acquiring San Diego-based Qualcomm Inc. in a deal valued at $106.67 billion.
The administration also took the unusual step of suing to block a vertical merger — a combination of companies in different parts of a supply chain — when the Department of Justice challenged AT&T Inc.'s $106.93 billion acquisition of Time Warner Inc. The case marks the first lawsuit against a vertical merger since 1977 when the Justice Department raised concerns about Hammermill Paper Co. owning paper wholesalers.
But the scrutiny has not stopped other companies from pursuing large deals.
In April 2018, Sprint Corp. and T-Mobile US Inc. announced a deal valued at $58.93 billion. It was one of 13 U.S. deals with a $5 billion-plus transaction value announced in the second quarter through May, up from 11 in the entire second quarter of 2017.
While some large deals will undoubtedly face regulatory scrutiny, the pursuit of such transactions shows just how conducive the M&A backdrop is.
