Global mergers and acquisitions (M&A) had a mixed first quarter with a slide in the number of deals announced but a rise in the overall value of dealmaking activity, according to a report from Mergermarket released Tuesday.
While the total number of deals announced fell by 17.9 percent versus the first quarter of 2016, overall deal value was up by 8.9 percent to a total of $678.5 billion. This dynamic fed through to lift average deal value to $403.4 million.
The move towards larger deals reflects a reversion back towards trends seen in 2015 – often referred to as the "year of the megadeal" – after a 2016 characterized by more of a focus on midmarket activity.
Key themes in evidence for the quarter were the spike in dealmaking in the consumer sector, an enormous scaling back of activity from Chinese buyers and a drop-off of inbound European M&A.
The consumer sector recorded a whopping $136.1 billion of deal value spread over just under 400 deals and including three megadeals (valued at $10 billion or above). The figure would have been substantially higher still had Kraft-Heinz's aborted $155 billion hostile bid for Unilever - which was withdrawn after only two days in the face of substantial opposition - proceeded.
Enthusiasm for pairing up within the sector is largely owing to a search for revenue growth, Cedric Besnard, consumer equity analyst at Citi, told CNBC via email on Tuesday.
"The erosion in barriers to entry and the slowdown in emerging markets is forcing struggling multinationals into finding new avenues of growth….M&A is actually the quickest route - sometimes easier than innovation and less risky than extreme cost cutting," Besnard observed.