Wednesday, February 07, 2007

Deal volume rises, but number of deals takes a dive

Steve Rosenbush at BusinessWeekOnline writes:

There's no sign of a slowdown in M&A deal volume. Five weeks into 2007, volume is on track to smash the $4 trillion record established last year, according to market researcher Dealogic. In the U.S., M&A volume for the year to date is $228.6 billion, up 86% from the comparable period of last year. Global deal volume is up 36% to $407.1 billion.
The number of deals has declined though. In the U.S., there have been 519 deals, down 38% from 841 during the comparable period of last year, according to Dealogic. On a global basis, the number of deals has declined 25% to 2.,392.
A few big deals, such as Blackstone and Vornado's bidding war for Equity Office Properties, are pushing up deal volume. The decline in the total numbers of deals is worth watching, though. The year is so young, that it's hard to read too much into the data. But the magnitude of the decline is significant, and bears watching. Is this the first evidence of a shift in M&A trends, toward a fewer number of larger deals?

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