M&A activity remains subdued in Q2 2024, keeping lid on investment bank fees

Global M&A activity remained muted in Q2 2024, S&P Global Market Intelligence said in a recent report. That comes as the Federal Reserve kept its policy rates elevated in its quest to lower inflation, making it more expensive to finance deals.

The number of global announced M&A deals stayed below 10,000 for three of the last four quarters. Some 9,719 transactions were announced, up from 9,696 in Q1 but down from 10,784 in the Q2 2023. Transaction value of $600.1B declined from $621.1B in the previous quarter and grew from $593.1B in the year-ago period.

For the first half of the year, the total value of global M&A deals increased 12% to $1.22T from a year ago.

“The quarterly total value is still far below 2021 levels, when the total surpassed the $1T mark each quarter, but the year-over-year rise in 2024 shows that dealmakers are more willing to execute large transactions,” the report said.

The amount of deal-making activity is crucial for investment banks, which earn fees for advising companies on sales and acquisitions and for underwriting equity and debt to finance them.

Through the first half of 2024, JPMorgan Chase (NYSE:JPM) generated the most revenue from global M&A than any other bank with $1.41B, representing a 9.9% market share, according to Dealogic. It’s followed by Goldman Sachs (NYSE:GS) at $1.40B and 9.8% market share, and Morgan Stanley (NYSE:MS) at $960M, or 6.7% share.

By transaction value, Goldman Sachs (GS) advised on the biggest chunk of global deals, 201, with a value of $498.8B, in 1H 2024. JPMorgan (JPM) came in next, advising on 188 deals with a value of $411.6B. And Morgan Stanley (MS) advised on 171 deals with a total value of $396.9B.

Europe M&A activity helped bolster the global view. Q2 total value of Europe M&A announcements jumped 65% Q/Q and 25% Y/Y to $182.9B, marking the highest level since Q2 2022, S&P Global said.

Their rankings in U.S. M&A mirrored their positions in the global activity. In revenue, JPMorgan (JPM), Goldman Sachs (GS), and Morgan Stanley (MS) topped the league tables, while, by M&A deal value, Goldman took the top spot, followed by JPMorgan and Morgan Stanley.

In global investment banking revenue, JPMorgan held the top spot with $3.95B in their first half of the year, representing market share of 9.5%, followed by Goldman Sachs (GS), with $3.01B and 7.2% market share. Bank of America (NYSE:BAC) came in third with $2.65B of revenue, or 6.4% market share.

In U.S. investment banking, the rankings were the same, with JPM generating $2.61B of revenue, Goldman at $1.90B and BofA at $1.70B, according to Dealogic.