Morgan Stanley M&A bankers outperform Goldman Sachs at home and abroad, among other surprises

While merger and acquisition activity has spiked globally during the first half of 2018, the U.S. has clearly offered the most fertile ground, accounting for more than half of global M&A volume during the first six months of the year. This shouldn’t come as a particular surprise as the political and economic climate in the U.S. is generally perceived as an advantage for dealmakers.  But volume aside, there were significant market share changes during the first half of the year, with several surprises.

Goldman Sachs vs. the world

Goldman Sachs is always a perennial contender for the number one spot on the M&A league tables, finishing second globally, second in the U.S. and third in Europe, according to Bloomberg’s first half assessment. No complaints, right? Well that depends on who you ask.

Goldman Sachs saw its global market share of M&A revenue increase by 4% during the first six months of 2018 but still lost its top ranking to Morgan Stanley, which boosted its market share by nearly 14%. Fellow rival J.P. Morgan gained serious ground on Goldman Sachs by increasing its market share by almost 11%, inching within less than 2 percentage points of Goldman in the league tables. Fourth-place Citigroup saw its slice of the global M&A pie increase by 14% during the first half.

Same song, different tune in the U.S., where Goldman Sachs increased its market share by a respectable 3.8% compared to a year ago. The only problem is that its closest competition, Morgan Stanley and J.P. Morgan, saw a 16.5% and 14.1% jump, respectively. Like in the global rankings, Goldman dropped from first last year to second for the first six months of this year, again behind Morgan Stanley.

In Europe, Goldman Sachs had perhaps its worst showing, dropping from first to third in the league tables while losing 8.5% in market share. Meanwhile, Morgan Stanley and J.P. Morgan each increased their market percentage by around 10% in the EU.

Other surprises

Bank of America M&A’s team had a tough first half of the year, dropping from 5th to 10th in the U.S. league tables while falling from second to fifth in Europe. It was the only U.S. bank ranked in the top 20 in M&A revenues that lost market share to the field globally.

One of the bigger surprises is Barclays, which, after languishing for several years during cost-cutting strategies, appears to be back on track in M&A. The U.K. bank slightly edged up globally but increased from 16th to 9th in the Euro league tables with an 8% local bump in market share. No other non-U.S. bank had a more successful first half in M&A.

Failing to protect home-court

Perhaps the biggest disappoints in M&A were local firms that failed to protect their domestic business from foreign rivals. Local bank BNP Paribas fell from 1st to 6th in M&A volumes in France, representing an absurd 43% lose in local market share, according to Bloomberg. Fellow French bank Crédit Agricole, meanwhile, saw its market share drop nearly 16% over the first half of the year. France is a small market, and things can change quickly, but U.S.-based Morgan Stanley accounted for an eye-opening 40% of French M&A revenues.

Overall, M&A activity is bustling. The number of deals for 2018 is right on pace to equal those inked in 2017, but the average deal size has grown from $80m to $98m over that stretch.

All things considered, you’d likely rather work for a U.S. bank no matter where your office is located. Morgan Stanley appears the ideal employer at the moment. The firm has locked up the top spot on the league tables through the first half of the year in the U.S., the EU and APAC, displacing Goldman Sachs in all three locales.

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