Mergermarket released its Global M&A roundup for Q1/16 which showed after a record year for M&A in 2015, 16.2% higher than 2007’s previous peak, there has been a cooling down period at the start of 2016.

Mergermarket said Global M&A is re-balancing towards a sustainable level with Q1/16 amounting to $597.4 billion. Following a significant drop from the previous three quarters that all posted more than $1 trillion, it was the lowest first-quarter value in two years, down 24% from Q1/15.

The report notes the mega-deal frenzy that started in 2014 is winding down as companies look towards less sizeable deals. During Q1/16, there were eight mega-deals (>$10 billion) valued at $158.5 billion, down from 13 worth $259.4 billion in Q1/15, but still the second highest Q1 value since 2009 (seven worth $209.8 billion).

The following are excerpts from the report:

Following a record year for M&A in 2015, deal activity in the U.S. showed signs of cooling in Q1/16. The country recorded 1,007 deals worth a total of $241.5 billion, down 33% compared to Q1/15’s 1,250 deals worth $61.3 billion, and down 54.6% compared to Q4/15’s 1,281 worth $532.9 billion.

U.S. outbound activity has been fast approached by China this year and its increasing level of foreign acquisitions despite the latter’s slowing economy. While the U.S. has seen its total outbound value fall by 5.7% from Q1/15, China’s outbound value has grown significantly in the same period by 348.8%. So far this year, China leads the U.S. 73.1% by outbound value with 85 transactions worth $82.1 billion, versus the U.S.’s 241 transactions worth $47.5 billion. Such a percentage could very well continue to increase as China strides toward larger transactions.

Private equity buyout activity struggled to compete against strategic buyers in 2015, demonstrated by the average price paid last year being just $640.2 million compared to a strategic company spending on average $902.8 million. However, to date in 2016, the average offer price by a buyout firm has increased slightly to $626.3 million, while the average value by strategics has decreased to $607.5 million. The following months could provide even more opportunities for buyout firms to secure targets.