BLANKFEIN: The M&A boom isn’t over yet

Some of the biggest mergers and acquisitions deals on the book have been falling apart recently.

But Goldman Sachs CEO Lloyd Blankfein, whose firm ranked No. 1 in the first quarter for global announced M&A volume, says activity hasn’t yet peaked.

“Volumes as a percentage of market capitalization are still below prior-cycle peak levels,” Blankfein wrote in his annual letter to shareholders, released Friday.

“We see this as a sign that there is still some room to run for M&A activity, particularly when equity markets show signs of sustained stabilization.”

Blankfein said he expects to see more consolidation in several sectors, including industrials, energy, mining, food, media, and telecom.

Last year was the best on record for M&A activity, with announcements topping $5 trillion throughout the year.

“While volumes are lower, the complexion of the M&A market is not dissimilar to 2015 in that it’s mostly driven by strategic buyers,” said Goldman’s cohead of M&A in the Americas, Matt McClure, in a recent interview with Business Insider.

“A lot of the drivers for a healthy M&A market persist: Corporates face a relatively low-growth macro backdrop and they’re using M&A to grow their top line, and while we remain in a fairly low cost of capital environment, it’s still an attractive time to be buying growth,” McClure said.

Some recent mega-deals have hit a snag, however. Most recently, a Pfizer-Allergan merger, which would have been worth $160 billion, officially got scrapped on Wednesday after the US Treasury announced new rules clamping down on so-called tax inversions. The proposed merger of Halliburton and Baker Hughes is also at risk.

Goldman Sachs will release first-quarter earnings next Tuesday, April 19.