A record $3.8 trillion year in global mergers and acquisitions has led Canadian dealmakers to call the current M&A environment good or excellent (97%), while a majority (56%) expect further merger acceleration in the first half of 2007, according to a new survey by Association for Corporate Growth (ACG) and Thomson Financial.

Thirty-eight per cent of survey respondents expect M&A activity to remain the same, and only 7% expect the pace to slow.

The survey polled 1,230 investment bankers, private equity professionals, corporate development professionals, as well as lawyers, accountants and other service providers involved in the deal economy in December 2006.

“Cash, confidence, competition and cross-border deals drove record M&A activity in 2006,” said Daniel Varroney, president and CEO of the Association for Corporate Growth. “None of these are in short supply as we enter the new year. We expect the global M&A machine to continue to fire on all cylinders in the first half of 2007.”

The 2006 merger worldwide total of $3.8 trillion was 38% higher than last year’s total, and surpassed the previous 2000 record of $3.4 trillion, according to Thomson Financial. The number of large transactions also beat the 2000 record, with 55 transactions of more than $10 billion in 2006 versus 39 in 2000. In the United States, half of the top 10 deals were done by private equity firms, which have been playing an increasingly active role fueled by record sized funds and easy access to debt financing.

Survey respondents were comprised of private equity, venture capital and buyout firm members (22%); investment bankers, intermediaries, brokers (25%); lenders, finance providers (12%); corporate professionals, entrepreneurs (17%); and service providers, such as lawyers, workout specialists, accountants and consultants (25%). The majority of respondents were from the United States (1,114), where 45 states were represented. Internationally, executives from 25 countries completed the survey.