The volume of mergers and acquisition is expected to soar through the end of 2007 as deal values soar, and any potential slowdown in activity will face a soft landing rather than a market meltdown, according to the Transaction Services group of PricewaterhouseCoopers.
   

Last week, Thomson Financial said global corporate merger activity in the first half of 2007 surged 53 percent to a record-high $2.5 trillion, exceeding the previous record of $1.9 trillion set in the first half of 1999. 

“We are moving deeper into an accelerated M&A rally, with larger transactions from bigger corporate buyers on the horizon,” said Bob Filek, a partner in PricewaterhouseCoopers’ Transaction Services group.

Greg Peterson, a partner in PricewaterhouseCoopers’ Transaction Services group, said this M&A boom will not face the hard crash that that occurred in 2001.

Large private equity funds are more diversified than they were at the start of the decade, making them better able to withstand a downturn and even profit from distressed-debt transactions, PricewaterhouseCoopers said.
Other factors that could cushion a slowdown include the diverse and expanded funding sources for M&A, a wider variety of industries with potential targets and and the many roles hedge funds are playing in the M&A market, the firm said.
“Public to private deals continue to fuel the market. The level of activity will depend on the amount of liquidity available to finance deals and the availability of targets that offer sufficient upside potential relative to purchase price,” Peterson said.