FirstFT: Global dealmaking falls to lowest level since start of pandemic

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Global dealmaking has fallen to its lowest level since the start of the coronavirus pandemic as surging inflation, tougher regulation and the war in Ukraine led to a slowdown in what had been a record period of mergers and acquisitions.

Just over $1tn worth of deals were struck in the first quarter of 2022, 23 per cent lower than the same period last year, with all continents facing a decline in M&A activity, according to Refinitiv data.

Despite the slowdown, private equity groups enjoyed their strongest-ever start to the year as they deployed vast cash piles accumulated during the pandemic. Buyout groups backed $288bn worth of deals, a 17 per cent rise compared with the first three months of 2021.

Have you got any feedback on FirstFT Europe/Africa? Share it with me at firstft@ft.com. Stay well and have a good weekend — Jennifer

Five more stories in the news

1. US orders biggest-ever oil release from strategic reserves The White House has announced a release of about 180mn barrels of oil from the emergency stockpile in a bid to cool crude prices following western sanctions on Russian oil imports. It also said it would punish domestic oil companies that did not increase drilling. Brent crude settled at $107.91 a barrel yesterday, down 4.9 per cent. President Joe Biden’s gamble is an acknowledgment that Arab allies are not about to help him out.

The latest on Ukraine:

• Mariupol: Russia’s assault on the besieged Ukrainian port has continued despite the Kremlin’s promises of a ceasefire, according to Kyiv. But morale among Moscow’s troops is suffering, the head of the British armed forces said, while Ukrainian forces have taken to using guerrilla counter-attacks.

• Gas: Russia said it will stop supplying gas to countries it considers “unfriendly” unless they pay in roubles. Our reporters explain the reason for the ultimatum.

• Economy: Russia has averted financial collapse from western sanctions by crimping the flow of funds out of the country.

• Podcast: Gideon Rachman talks to Catherine Belton, author of the bestselling book Putin’s People, in the latest episode of Rachman Review.

• Opinion: The FT View is that Moscow is struggling to find counter-sanctions that do not harm its own economy. At some point, the west will have to talk to the enemy. That will mean doing a deal with Putin, writes Edward Luce.

• On the ground: Journalist Tim Judah chronicles the first 21 days of the war in this picture diary of his reporting trip to Ukraine. More than 2mn refugees have fled to Poland. Here are their stories, in their own words.

2. UK consumers panic ahead of 54% price rise Websites for some of Britain’s largest energy companies crashed yesterday as consumers worried about the escalating cost of living crisis rushed to submit gas and electricity readings ahead of a 54 per cent rise in prices from April 1.

• Opinion: The effects of rising prices will make Chancellor Rishi Sunak’s claims to be cutting levies ring hollow, writes Chris Giles.

3. Abu Dhabi state funds were used to buy NSO Mubadala Capital, a state-owned investment company, has been an investor since 2019 in the Israeli cyberweapon maker, whose Pegasus spyware has been traced to the phones of journalists, activists and the estranged wife of Dubai’s ruler.

4. S4 Capital share price falls Shares in Sir Martin Sorrell’s digital advertising company fell as much as 14 per cent yesterday, following a decline that wiped more than a third of its market value the day before, as concerns grew over a second delay to its financial results.

5. UK house prices rise at fastest pace in 18 years Annual growth in house prices hit 14.3 per cent, up from 12.6 per cent in February, according to mortgage provider Nationwide, but experts warned of a slowdown in the months ahead as inflation rises.

The days ahead

EU-China summit Leaders of the EU and China meet for a “difficult” virtual summit with Russia and Ukraine at the top of the European agenda. Go deeper with the most recent edition of our Europe Express newsletter. Sign up here.

UK corporate and government financial statements deadline There is additional significance this year as the statements lay bare the roots of inflationary pressures. The National Minimum Wage increases from £8.91 to £9.50 per hour. The EU will also have flash March inflation data.

• More on rising prices: We have a day of global comparisons of business confidence with the manufacturing purchasing managers’ indices out for the EU, France, Germany, Italy and the UK. In the US, monthly payroll reports will shed light on the strength of the labour market and workers’ bargaining power.

Elections French president Emmanuel Macron is relying on a big rally on Saturday in La Défense outside Paris to revitalise his re-election campaign. Hungarian president Viktor Orban will seek a fourth successive term on Sunday despite concerns over his ties to Putin. Serbia holds a general election the same day, while Costa Rica has a presidential run-off.

If you’d like to experience our podcast Working It live, sign up for the Breakfast Series event in London on Wednesday April 6, where host Isabel Berwick and columnist Pilita Clark will be discussing The Great Resignation. All ticket proceeds go to the Choose Love Ukraine fundraiser.

What else we’re reading

The age of the autocrat Since 2000, the rise of the strongman leader has become a central feature of global politics. But it is possible that the catastrophe of Russia’s invasion of Ukraine will permanently discredit this style of politics, writes Gideon Rachman.

We’re still wrestling with the incoherence of Brexit Leaver or Remainer — and let’s face it, it’s irrelevant now — it’s hard to dispute that elements of the UK’s departure from the EU haven’t fared well upon contact with political or business realities. And so it remains, writes Helen Thomas.

Memories of Lithuania’s Bloody Sunday It was January 13, 1991, and Leyla Boulton watched as Soviet tanks and soldiers mowed down civilians at the Vilnius television tower. Fourteen died that day. Putin’s war holds echoes of the 1990s, with the return of the Kremlin’s lies, she writes.

AI industrialisation offers great promise and some peril On the peanut butter spectrum, artificial intelligence is moving from smooth to crunchy, as the powerful tool is being used for everything from search engine optimisation to accelerating drug discovery. But private companies are reaping almost all the gains, writes John Thornhill.

Corporate America’s ‘what if’ mindset American companies are starting to warn against using non-domestic supply chains. So, what does this mean for investors? Judging from recent conversations with C-suite executives, there are at least three practical implications, as Gillian Tett outlines.

Property

From a historic flat near the Picasso Museum in Málaga to an Andalucían villa with courtyard, colonnades and fountains, do not miss these five homes for sale in southern Spain.