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M&A bounces back but will it last?

M&A bounces back but will it last?

The failed merger between the Singapore Exchange and the ASX won't dampen what has been a stellar first quarter for the M&A market, according to the head of the corporate group at Freehills.…

The failed merger between the Singapore Exchange and the ASX won't dampen what has been a stellar first quarter for the M&A market, according to the head of the corporate group at Freehills.

The remarks from Richard Loveridge were made in reference to the release of the first quarter M&A league tables for 2011 that have shown M&A activity in Australia is at its highest level in four years.

According to Thomson Reuters, M&A activity for Q1 2011 totalled US $39.9 billion ($38.1 billion), the highest first quarter volume since the boom times of 2007. This was more than double the US $16.2 billion recorded last year.

Loveridge said the Federal Government intervention to block the $8.4 billion merger between the SGX and ASX - in which Freehills has been acting for the ASX - will not ward off potential foreign entrants and hinder what has been a buoyant market.

"I don't think they will [be scared off]," Loveridge said. "I am confident Australia will still be very much seen to be open for business for international entities."

Loveridge added that this is the case due to the "diversity of themes" in the M&A market. He cited deals that Freehills has recently been involved in to make his point.

"We have resources consolidation continuing, and some overseas operational purchasing, such as the acquisition of the Great Southern," he said. "That diversity of themes gives the market a nice depth."

In terms of announced deals in Australia and New Zealand, Freehills was ahead of the pack, being involved in 14 deals with a combined value of just under $20 billion on the Thomson table.

Allen & Overy and Gilbert + Tobin, were next, acting on deals in excess of $9 billion. International firms Skadden, Arps, Slate, Meagher & Flom and Simpson Thatcher & Bartlett round out the top five.

While they may have missed out on sealing the ASX merger, Clayton Utz topped the Thomson Reuters survey for completed deals. The firm has already been involved in 18 deals worth a combined value of $21.7 billion.

Mallesons Stephen Jaques, Norton Rose, Allens Arthur Robinson and Freehills round out the top five.

Norton Rose are the big movers in the survey, climbing from a ranking of 34th for Q1 2010 to third for the most recent period.

The Bloomberg analysis paints a similar rosy picture for M&A in Australia.

In terms of announced deals by value, it puts Freehills on top, acting on 14 deals with a combined value of just over $14.5 billion. Freehills pips Allens and Clayton Utz, with Weil Gotshal & Manges and Allen & Overy rounding out the top five.

The Bloomberg survey lists Allen & Overy on top for announced Asia-Pacific transactions (ex-Japan), with its market share of 19 per cent well ahead of Freehills (11.6 per cent), Allens (11.5 per cent), Clayton Utz (11.1 per cent) and Skadden (9.6 per cent).

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