Infralogic’s 1Q24 report shows deal activity hit a five-year low by value, reports Ashay Surve

The three-month period ending March 31st saw 624 transactions amounting to USD 177bn, representing a 31% decrease in value and a 26% decrease in volume compared to the same period in 2023, primarily because of the high base effect, according to Infralogic’s Ranking Report.

Among advisors, Milbank was the top legal advisor by number of transactions and value, followed by Allen & Overy taking the second position. Morgan Stanley was the top financial advisor by deal value and Black & Veatch led the technical advisors’ table.

Mitsubishi UFJ Financial Group (MUFG & BTMU) topped the loan arranger rankings by value and count. Notably, BNP Paribas jumped to the second spot after being sixth in the 1Q23 rankings.

M&A and greenfield transactions off to a slow start in 2024; additional financing shines

The first quarter of 2024 saw a significant decline in M&A activity, amounting to USD 60bn in value. This represents a decrease of almost 45% compared to the USD 109bn recorded in the first quarter of 2023.

Greenfield transactions went down to USD 58.55bn from USD 80.23bn in 1Q23. However, the additional financing deals — which includes follow-on debt secured not for debt repayment but for capex needs — clocked 77 transactions worth USD 21.45bn up from USD 14.25bn during the same period last year.

Europe outperforms North America after marginal difference in previous YoY quarter.

In 1Q23, Europe and North America showed a marginal difference in deal value of less than USD 1bn. However, in 1Q24, Europe surged ahead with USD 69bn worth of closed deals, surpassing North America, which recorded USD 55.62bn during the same period. The significant increase in Europe’s deal value can be attributed to several multi-billion dollar energy deals that closed during the quarter, such as the USD 7.52bn Automotive Cells Company Gigafactory Portfolio (Billy-Berclau Douvrin, Kaiserslauten, Termoli), USD 7.07bn Boden Green Steel Factory (H2 Green Steel), and USD 4.12bn Naturgy Sale (4.15% Stake) (2024).

Power Surge: Banks double down in 1Q24

The Power sector globally saw a 37.7% increase in debt allocation, with USD 14.61bn compared to USD 9.08bn during the same period in 2023. Sumitomo Mitsui Banking Corporation (SMBC) was the top lender with USD 978m of loans issued followed by BNP Paribas (USD 807m) and Barclays (780m) in second and third, respectively.

JP Morgan topped the list of financial advisors by value. Citigroup held second and EY ran third.

Energy displays resilience: Weak Q1 YoY performance, but shows stable growth in last three quarters

Energy deals fell by 45% to USD 51.87bn from USD 96.28bn in 1Q23, however, the sector grew steadily at an average growth rate of 9.01% in the last three consecutive quarters. Despite the steep fall in the number of deals by 32% to 63 deals, compared to 93 deals in the first quarter of 2023, the sector continued to dominate by deal value globally.

Latin America sees record-breaking Q1 YoY

In 1Q24, Latin America experienced its most successful first quarter yet, with USD 26.32bn in closed deals, outstripping Asia to be in third position region-wise.

The sector saw a slight decrease in the number of deals, dropping from 78 to 63 year-over-year (YoY). However, the substantial increase in value can be attributed to a few major transactions such as the USD 6.2bn Iberdrola 8.5GW Combined-Cycle Gas and Wind Portfolio Sale, the USD 3.12bn Mayakán Pipeline Expansion, and the USD 2.5bn Centinela Copper Mine Expansion.