Deals and IPOs

Goldman: Here's what's sparking record M&A deals

Mega deals in the spotlight

The surge in mergers and acquisitions this year has been driven in part by shareholder demands on CEOs, said David Solomon, co-head of investment banking at Goldman Sachs.

"There's a lot of pressure on a quarter-to-quarter basis," Solomon told CNBC's "Squawk Box" on Tuesday. "I think that has an impact in terms of the way CEOs are behaving."

Read MoreM&A hits another high, and Goldman the big winner

In addition to appeals from investors, cheap borrowing costs are also putting CEOs in the buying mode, he said. "There's no question that with a low interest rate environment it has an impact on M&A activity."

But Solomon said the Federal Reserve's near-zero percent rates since late 2008 alone had not been enough, until companies started gaining more confidence in the economy.

"The stability that has come over the course of the last couple of years has had an impact in pushing CEOs along to be more acquisitive," he said.

But even with the Fed possibly on the verge of its first rate hike in nine years next month, Solomon said companies should not be rushing out to make deals, because central bankers have been indicating a shallow path higher for rates.

Announced M&A activity has soared 38 percent from last year, exceeding $4 trillion this year, according to tracking firm Dealogic.

In a year expected to bring record transactions, Goldman leads all deal-making shops on Wall Street, giving advice on deals worth about $1.4 trillion this year.

"Our pipeline still looks relatively robust," Solomon said. JPMorgan and Morgan Stanley closely follow Goldman in the total value of deals they've been involved in.

Corporate acquirers are continuing to "get rewarded generally by the market," he said. "You look at the stock price for a corporate acquirer on the day of an M&A announcement. So far in 2015 that number has been positive."

"And that continues to spur other deals," he said.