Report: 2011 M&A gaining on 2007 record-breaker

Mar 28, 2011

We keep hearing about how M&A activity is on the rise, but that we aren't anywhere near the bubble environment of 2007. Well, it seems that the gap is narrowing.

Thomson Reuters has released preliminary Q1 data showing $717 billion in 2011 M&A activity through last Thursday, which is off just 25% from the same period in 2007. And that figure shrinks even further if we add today's $2.4 billion acquisition of GSI Commerce (gsic) by eBay (ebay).

The 2011 total represents a 58% increase over the same period in 2008, inclusive of a 52% increase in private equity-sponsored transactions. About half of the deal volume is for U.S. targets (up 36%) and around one-quarter is for European targets (up more than 100%), while both emerging market and cross-border deals experienced declines.

Energy and financials were the leading sectors, although materials experienced the largest year-over-year growth (see chart). Financials were sparked by the $59 billion restructuring for AIG -- a deal whose inclusion here is questionable -- while energy got a boost from Duke Energy agreeing to buy Progress Energy for $26 billion. Those are the first and third-largest so far in 2011, sandwiched around AT&T buying T-Mobile for $39 billion.

On the private equity side, the largest deal is Blackstone Group's (bx) agreement to acquire the U.S. shopping mall assets of Australia's CentroProperties for $9.4 billion. It's followed by Apax Partners buying Smiths Medical for nearly $3.9 billion and Clayton Dubilier & Rice taking Emergency Medical Services private for $2.9 billion.

In a separate report, S&P Leveraged Commentary & Data reports that leverage multiples for large deals have climbed half a turn to 5.2x -- lower than the heights of 2007, but besting 2008, 2009 or 2010.

All products and services featured are based solely on editorial selection. FORTUNE may receive compensation for some links to products and services on this website.

Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions