A good first half of the year, despite everything

 As the first half of the year draws to a close (where have the 6 months gone?) there are signs that despite everything global deal activity has stayed remarkably robust. In terms of M&A deals (excluding IPOs and capital placings) Zephyr recorded just over USD 1.8bn worth of announced M&A deals in H1 2017. This figure represents just under a 6 per cent increase on the same time period in 2016 and is the third highest figure for a six-month period recorded for announced deals in the last five years.

If you would have asked dealmakers at the beginning of the year whether or not they would have expected such a good first six months I am pretty certain the answer would have been no. Yes, they would have surely repeated the mantra of “there is plenty of dry powder available to private equity firms” and there are clearly large corporates sat on equally large war chests, but despite ongoing geo-political turbulence the value of deals announced has continued to rise. 

If we look more closely we see that the number of deals is significantly lower than has been recorded in the first six months of each of the last three years, providing further evidence that the market chatter about “multiples” being high is clearly true. Additional proof of this is available to us when we look at the number of “mega deals” announced so far in 2017. There have been 17 deals with a deal value higher than USD 10bn, generating aggregated deal values of over USD 343bn. This is the highest number recorded in the first six months of the year since the onset of the global financial crisis, apart from in H1 2015, and we all know how that year turned out!  

The highest ever level of global deal activity was seen in 2015, and whilst the first half of this year is impressive it remains to be seen whether the voracious appetite for deals and high prices will continue into the second half of 2017. In a world that seems to be increasingly chaotic and where geo-political uncertainty appears to have become the new norm, the M&A deal juggernaut continues to roll right on through it!

Filed under: 2017”, dealmaking, global, M&A, “H1