This is the exchanges of Goldman Sachs, will be discussed developments currently shaping markets, industries in the global economy.

I'm Jake Stewart, global head of corporate communications here at the firm.

Today we're joined by Tim and Grassea, co-chairman of global mergers and acquisitions

in the Investment Banking Division.

Tim has decades of experience in banking,

and today he'll be talking to us about how companies

have been approaching M&A and strategy

through the volatile markets we've seen in the last few months and what lies ahead.

So Tim, welcome to the program.

Thank you.

So you work with a lot of CEOs at very large companies and some smaller ones, but how would you describe business sentiment overall?

What are you hearing in your conversations?

And what's the appetite for strategic acquisitions for M&A

pre-COVID and today?

So there's a lot packed into that question.

Let me start with pre-COVID.

In the first month and a half, two months of 2020. We actually saw a market slowdown in M&A activity globally and in particular in the United States.

Now it's difficult to assign trends to two months of data, but order of magnitude, the M&A business, the announced transaction activity was down plus or

40% relative to prior year. We were expecting a year that would be down

relative to prior year, maybe not down 40%.

But what was causing that? I think there were two things causing that. Around the world,

valuations had become elevated and very full.

...