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The blistering pace of mergers is hottest since 2007

MARKETWATCH 7:19 AM ET 3/26/2015
Symbol Last Price Change
KRFT 83.17 0 (0%)
QUOTES AS OF 04:15:00 PM ET 03/25/2015


NEW YORK (MarketWatch)-- The Wall Street deal engine is in overdrive.

Corporate mergers are seeing one of their best starts to the year since the 2008 financial crisis sucked the air out of what had been a high-octane boom in corporate wheeling and dealing.

But signs that corporate executives are no longer gun-shy about deal making is becoming increasingly evident.

Look no further than Wednesday's blockbuster tie-up (http://www.marketwatch.com/story/buy-signal-buffett-says- heinzkraft-is-his-kind-of-transaction-2015-03-25)between Kraft Foods Group Inc.(KRFT) and H.J. Heinz Co as proof.

In fact, the so-called announced merger-and-acquisition tally so far this year globally is about $802 billion, according to Dealogic. That's more than $100 billion better than global deal activity during the same stretch last year and the best year-to-date global M&A total since 2007, when M&A deal flow was a brisk $978 billion.

Deals like Kraft/Heinz, involving Warren Buffett, and well-regarded private-equity firm 3 G Capital, have the potential to spark more mergers in similar food and beverage combinations, as MarketWatch columnist Philip Van Doorn explains here (http://www.marketwatch.com/story/the-kraft-heinz-merger-may-spur-a-takeover-of-these-companies-2015-03- 25).

It isn't clear if the M&A boom can continue to impress, though. That is particularly as investors fret about economic global uncertainty, in places like Europe and Asia and a Federal Reserve federal funds rate hike looms.

Slumping crude oil (CLK5) may also lead to a wave of mergers in the oil-and-gas sector as some shale oil producers run into trouble (http://www.marketwatch.com/story/dune-energy-to-begin-swift-bankruptcy-process-2015-03-11).

The Wall Street Journal, points out that a true M&A boom needs to span a number of industries (http://www.wsj.com/ articles/to-last-m-a-boom-needs-to-broaden-1420130620?KEYWORDS=mergers&cb=logged0.19453865475952625) so there may be room run.

But sometimes M&A boom times are followed by doom-and-gloom times, like back in 2007.

There are certainly enough signs that U.S. stocks may be getting too rich and the money flowing too freely. Read: Stocks re overpriced, overleveraged, headed for trouble (http://www.marketwatch.com/story/stocks-are-overpriced- overleveraged-headed-for-trouble-2015-03-25)

-Mark DeCambre; 415-439-6400; [e-mail]

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