Mergers approach pre-recession levels

NEW YORK -- Wall Street's deal-making renaissance shows no sign of ending.

Heinz's acquisition of Kraft Foods, announced Wednesday, has helped maintain the momentum in the market for mergers and acquisitions.

So far this year, companies globally have struck deals worth $802 billion, according to data provider Dealogic. That compares with $733 billion in the first quarter of 2014 and makes it the best first quarter for deal-making in at least five years.

Other big deals in the works include Simon Property's bid to buy rival Macerich, which owns and operates shopping malls, and AbbVie's deal to buy Pharmacyclics, a maker of cancer drugs.

In the immediate aftermath of the recession, companies concentrated on cutting costs, focusing on survival rather than expansion. That focus, combined with an improving economy, helped them build up huge cash piles.

Now, as the unemployment rate has fallen and growth has picked up, executives have become more optimistic about the future and want to think about growth. Corporate leaders are also getting more pressure from shareholders.

Financial markets are helping, too. A six-year rally in stocks since the end of the recession is improving confidence, and with interest rates remaining low, acquirers can borrow money cheaply to finance deals.

One of the quickest ways to grow is to acquire a rival.

The value of the deals has been increasing steadily since the end of the recession, reaching $3.6 trillion globally last year. That's the third-highest on record, after 2007 and 2006.

The stronger dollar also should lead to more U.S. companies making acquisitions overseas, analysts say. The dollar has surged against most major currencies in the past six months. The U.S. currency has gained 14 percent against the euro in that period and 9 percent against the Japanese yen.

Business on 03/26/2015

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