Skadden Leads Big Law M&A Firms as Megadeals Return to the Stage

Skadden is Big Law’s top mergers and acquisitions adviser so far this year, as the lucrative deals market starts to show signs of life.

Lawyers at Skadden Arps Slate Meagher & Flom were the principal advisers on $118 billion worth of deals during the first quarter, according to Bloomberg data. Wachtell Lipton Rosen & Katz followed, advising on transactions valued at nearly $115 billion and Simpson Thacher & Bartlett took the third spot with $79 billion in deals.

Global M&A transactions volume rose by 37% to more than $780 billion in the first three months of 2024, compared with the same time last year. A resurgence in megadeals helped drive the upswing.

“It’s still slower than what M&A practitioners would like, both in terms of the number of deals and the overall size,” said Krishna Veeraraghavan, global co-head of mergers and acquisitions at Paul, Weiss, Rifkind, Wharton & Garrison, which was among the 10 leading deals advisers. “Some of the bigger deals, more than $10 billion in size and some north of $20 billion, have come back. That’s giving reason for optimism.”

Several of the top-performing law firms cashed in on the return of megadeals.

Wachtell advised Capital One Financial Corp. on its plan to buy Discover Financial Services in a $35 billion all-stock deal announced in February. Sullivan & Cromwell represented Discover in the transaction.

The same month, four law firms—Wachtell, Skadden, Paul Weiss, and Vinson & Elkins—advised on another megadeal, Diamondback Energy’s $26 billion acquisition of Endeavor Energy Resources LP. Three firms—Skadden, Cleary Gottlieb Steen & Hamilton, and Goodwin Procter—worked on a separate $35 billion transaction a month earlier, with software company Synopsys agreeing to buy Ansys.

“There are a number of deals that were done on the strategic side, PE activity was slower,” said William Aaronson, head of mergers and acquisitions at Davis Polk, which also was among the leading deals advisers for the quarter. “I do think pipelines have been very good, maybe better than they’ve been in a while.”

Dry Powder

Dealmakers continued to cite some of the hurdles that slowed activity to historic lows last year. Those include expensive credit, uncertainty from investors, valuation gaps and mismatched expectations.

Regulatory pressure continued to extend deal timelines over the quarter, Aaronson said, but isn’t stopping deals from happening altogether.

“As a general matter I don’t see much evidence that the regulatory environment is holding deals back,” he said. “However, companies are doing more work upfront to analyze the regulatory risks of their transactions and prepare for the regulatory approval process.”

Private equity activity, which powered the 2021 deals boom, has been hindered by high interest rates that make it tougher for sponsors to borrow to fund transactions.

There are signs that more private equity deals could be on the horizon. Several funds are sitting on capital they have already raised and need to deploy, said Brian Fahrney, global co-leader of Sidley’s M&A and private equity group. They’re also raising more cash.

“There definitely has been some new fundraising going on,” Fahrney said. “Successful PE sponsors can always raise money even in difficult times, so we’ve seen some of that.”

—Meghan Tribe contributed to this report.