Global M&A activity has held steady since last year, slipping slightly from $2.74 trillion in 2010 to $2.70 trillion this year, according to data provider Dealogic's preliminary figures for 2011.
However, the total value of buyouts by financial sponsors fell markedly, decreasing by 9 percent to $186.4 billion – suggesting that private equity firms have been more severely affected by the ongoing economic turmoil than cash-rich corporate acquirers.
Private equity firms were evidently in exit mode in preparation for the next major round of fundraisings, with sales of portfolio companies outstripping new investments for only the second time on record.
Nonetheless, exit activity fell compared to last year: the total value of sales by private equity firms was $213.5 billion, down 6 percent from last year's figure of $227.1 billion.
The value of secondary buyouts also fell sharply, dropping 22% to $47.3 billion.
Not surprisingly, global M&A activity fell sharply in the second half of the year as economic conditions worsened: the second half total was 22% down on the first half, while the projected final quarter figure of $537.1 billion would be the lowest quarterly figure since Q3 2009.
The US and Europe proved more robust than emerging markets. In the US, M&A deals totaled $996.5 billion, the highest annual figure since 2008 and a 12 percent increase on last year's total – although the number of deals was down slightly (9,873, compared with last year's 9,965).
In Europe, the situation was reversed, with the value of deals falling but volume increasing. Volume rose 5 percent to 14,519 deals, the highest figure on record, but the total value of deals was $760.4 billion, a 3 percent decrease on the 2010 figure.
The values of M&A deals in the Middle East, Africa and Asia Pacific (ex-Japan) all fell, by 18 percent, 35 percent and 4 percent respectively. China stood out, however, with a total value of $182.3 billion (on a par with last year's figure) making it the most popular country in Asia for deals.
Sector-wise, oil and gas saw the most activity, with $259.3 billion-worth of deals (although this represented a fall of 17 percent from last year's figure). The mining sector saw its highest volume to date with 2,622 deals worldwide; total deal value rose to $159.2 billion.
Other popular sectors included finance ($251.7 billion), utilities and energy ($235.8 billion), healthcare ($223 billion) and technology ($215.3 billion). The latter proved the most popular with private equity firms: buyouts in the technology sector totaled $36.2 billion, whilst exits totalled $34.7 billion.
Surprisingly, given the increased economic uncertainty, there were fewer deals pulled this year than last. The total value of withdrawn M&A deals came to $440.9 billion, compared to $511.7 billion in 2010. The number of withdrawn deals – 1,041 – was also the lowest since 2007's figure of 872.