Global Deal Values Rise 11.6% in First Half

Mega-Deals Continue to Drive Acivity, Says Mergermarket

Global M&A  values rose 11.6% in the first half of the year to $1.7 trillion from $1.5 trillion a year earlier, according to research firm Mergermarket, their highest levels since 2007.

Large deals – those valued over $10 billion each – were also on the rise, with 28 such transactions in the in the first six months of 2015, up from 16 mega-deals in the first half of 2014. Deal values rose 87.2% in the more recent period to $678.1 billion, compared to the same period in 2014, said Mergermarket.

The U.S. again led the pack, with a total deal value of $721.5 billion, up 20.7% from 2014 and the highest level since 2007.

Leading U.S. deals was Charter Communications pending $78.7 billion purchase of Time Warner Cable, followed by HJ Heinz’ $54.5 5 billion buy of Kraft Foods. In the U.S., deal values in the technology sector rose 11.7% to $198.3 billion, while telecom deal values increased 10.3% to $176.1 billion.

According to  Mergermarket, confidence in the U.S. market is high, “fueled by low interest rates, stable economic growth and an abundance of corporate cash.”

Deal multiples are also nearing record levels. According to Mergermarket, cash flow multiples rose to 17.7 times in 2015, compared to 14.3 times in 2014, their highest level since 2007’s 17.9 times average.

Europe had the biggest deal so far this year – Royal Dutch Shell’s $81.2 billion purchase of BG Group. Three of the top five M&A deals in Europe were in the telecom sector – BT Group’s $19 billion purchase of EE Ltd; Hutchison-Whampoa’s $15.3 billion acquisition of Telefonica UK; and Nokia Oyj’s $15.3 billion buy of Alcatel-Lucent.