Skadden Leads Big Law M&A Advisers Amid Surge in Megadeals

Skadden Arps Slate Meagher & Flom emerges as the top mergers and acquisitions (M&A) adviser in the legal realm for the year's first quarter, signaling a resurgence in the lucrative deals market. According to Bloomberg data, Skadden's lawyers played a pivotal role in advising on transactions totaling $118 billion during this period. Following closely behind are Wachtell Lipton Rosen & Katz and Simpson Thacher & Bartlett, with deals valued at nearly $115 billion and $79 billion, respectively.

The uptick in global M&A transaction volume, which surged by 37% to surpass $780 billion in the first three months of 2024 compared to the same period last year, marks a promising trend. A notable factor driving this surge is the resurgence of megadeals, injecting optimism into the M&A landscape.

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Krishna Veeraraghavan, global co-head of mergers and acquisitions at Paul, Weiss, Rifkind, Wharton & Garrison, acknowledges the market's slow pace but remains hopeful, particularly with the return of significant deals exceeding $10 billion and even surpassing $20 billion. This resurgence in megadeals has notably benefited top-performing law firms, showcasing their ability to capitalize on high-value transactions.

Wachtell's involvement in Capital One Financial Corp.'s $35 billion acquisition of Discover Financial Services and Diamondback Energy's $26 billion acquisition of Endeavor Energy Resources LP underscores the significance of these megadeals. Other notable transactions include software company Synopsys' $35 billion deal to acquire Ansys, with involvement from firms like Skadden, Cleary Gottlieb Steen & Hamilton, and Goodwin Procter.

Despite hurdles such as expensive credit, investor uncertainty, valuation gaps, and regulatory pressures, dealmakers remain resilient. Regulatory scrutiny has extended deal timelines, but it hasn't halted deal-making altogether. Instead, companies are proactively addressing regulatory risks upfront to navigate the approval process smoothly.

Private equity activity, a driving force behind the 2021 deals boom, faces challenges due to high-interest rates. However, signs indicate a potential uptick in private equity deals as funds sit on capital ready for deployment and continue to raise additional funds. Brian Fahrney, global co-leader of Sidley's M&A and private equity group, highlights the ongoing fundraising efforts among private equity sponsors, demonstrating resilience in challenging market conditions.

The landscape of M&A continues to evolve, with Skadden and other leading law firms at the forefront of facilitating major transactions. As the market navigates through uncertainties, the resilience and adaptability of dealmakers and legal advisers remain pivotal in driving the deals market forward.