Expect More Mergers Ahead: Billionaire Wilbur Ross
As bulls question the strength of a rally that catapulted stock indexes to multi-year highs, some market players were encouraged by a burst of mergers and acquisitions (M&A), which included names like U.S. Airways, Constellation Brands and H.J. Heinz.
A mere six weeks into 2013, roughly $190 billion in takeover deals have been announced since the year began. That makes it the best start for M&A since 2005.
"There are many more M&A deals done in bull markets than in bear markets because when company's own shares are trading higher, they feel better about it," said Ross, CEO of WL Ross & Co., on CNBC's "Futures Now." "Whether they're using shares or cash, they're more likely to be in an affirmative, aggressive mind."
Additionally, Ross said many major U.S.-based companies have tremendous amounts of cash on their balance sheets, which they're more likely to lavish on striking more deals. According to the tycoon, it makes more sense for a company to buy another business for its manufacturing plant or property, rather than pay to build new assets from scratch.
Heinz is known more for its ketchup than its plants, but the deal made waves in markets Thursday anyway. The consumer giant surprised investors by announcing it was being purchased by 3G and Berkshire Hathaway, a conglomerate owned by renowned investor Warren Buffett.
Looking ahead, Ross expects more M&A deals in the consumer products sector.
"This Heinz deal is probably the biggest one ever in consumer products. It's certainly the biggest one I can remember," Ross said. "Generally, there is a follow-on effect once there's a big transaction."
(Read More: Cramer: This Is the 'Year of the Deal')
Also on the M&A front, American Airlines and US Airways announced they will merge to form the largest airline in the world in a deal valued at $11 billion. Doug Parker, CEO of US Airways, will become CEO of the new American. The deal comes after several turbulent years marked by bankruptcy protection filings and consolidation in the U.S. airline industry.
Elsewhere in the market, Anheuser-Busch InBev said it had agreed to sell Mexican brewer Grupo Modelo's Piedras Niegras brewery to Constellation Brands, in a deal valued at nearly $2.9 billion. Constellation skyrocketed nearly 40 percent to lead the S&P 500 gainers.