Global M&A Activity hotting up nicely.

With one working day of the first half of the year left, global deal activity is hotting up nicely - a bit like the European weather! As of this morning global announced deal activity stood at USD 2.7 trillion. This is the highest figure recorded since the first full half year of 2007, when a staggering USD 3.1 trillion’s worth of deals were announced. Global private equity deal activity is also at its highest H1 level since H1 2007, with announced deal values standing at USD 259bn, and whilst this figure is the highest total recorded in the first six months of the year since 2007, it is still considerably short of the staggeringly high level (USD 620bn) recorded back in H1 2007.

H1 2015 has seen a flurry of large corporate spending on deals. So far this year we have seen 26 deals greater than USD 10bn in value announced, which is 3 more “mega” deals than were seen in the first half of 2007. When we bring private equity-backed USD 10bn+ deals in to the equation, whilst the 2015 number rises to 28 deals, this is short of the overall figure of 32 deals in H1 2007 when private equity deals are included in the stats.

So what does this tell us about deal making in 2015 v deal making in 2012? Well I think there are a couple of things we can take away from the figures so far; firstly corporates have been holding on to their significant cash reserves for some time and finally the stars seemed to have aligned and many corporates have been happy to throw themselves back in to the deal making process with clear strategic vision; secondly  - again we know that PE firms have a significant amount of “dry powder” but it would appear that this is being utilised much more in the secondaries market rather than the significant take privates that PE firms participated in back in 2007.

However the blot on the horizon and the unknown factor is Greece and its debt crisis. Financial markets over the last few days have been exceptionally volatile with the brinkmanship that Greece is participating in with the EU and the IMF, and should Greece default and exit the Eurozone, the volatility experienced in the financial markets could easily spread, bringing a more conservative view to dealmaking in the second half of the year.