Friday, June 29, 2007
Dealogic's preliminary M&A activity figures for the half year are out. The numbers are record-setting. M&A activity was $2,780 billion during the first half of 2007. The pace was set by private equity takeovers which reached a record high of $568.7 billion representing 20% of total M&A activity. This was 23 percent higher than the previous record set in the second half of last year of $459.2 billion. In the United States, private equity accounted for 35 percent of total merger volume, up from 22 percent in the first half of 2006.
By region, Europe, the Middle East and Africa M&A activity was at $1,230 billion or 44 per cent of total volume. In the United States, M&A volume totaled $1,005 billion, up 36 percent from the same period a year ago. The number of U.S. deals, though, fell 12 percent. April was the busiest month of the year in the United States, with $210.5 billion in deals, while June was the slowest month with $124.2 billion in deals. In the Asia- Pacific region M&A activity reached $353.4 billion. China and India were particularly hot. In China there were 1,159 deals valued at $55.2 billion in the first half of the year -- up 40% from 1,022 deals valued at $39.4 billion a year ago. In India there were 548 M&A deals valued at $39.4 billion in the year through June, a figure more than double the comparable last year period, when there were 457 M&A deals valued at $18 billion.
Goldman Sachs was the leader in the M&A league tables for the period. Goldman advised on 223 deals with a total value of $844 billion. Goldman was followed by Morgan Stanley ($805 billion), Citigroup ($769 billion) and J.P. Morgan ($724 billion).
Naysayers are likely to highlight the drop in activity from April to June as a sign that the M&A bubble is deflating. But, while it is uncertain when the M&A boom will end, this year is still likely to be a record one for M&A. If the current pace is sustained, 2007 will have about $5,600 billion in merger volume, compared with about $3,800 billion for 2006. Another good bonus year for bankers and hopefully lawyers.