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Corporate America just had the biggest deal-making month ever

AT&T signage is displayed on a monitor at the New York Stock Exchange in New York.
Michael Nagle | Bloomberg | Getty Images
AT&T signage is displayed on a monitor at the New York Stock Exchange in New York.

The value of announced U.S. mergers and acquisitions in the last few weeks makes October a record month for deals.

A fresh round of deal announcements Monday morning took the month's value to about $337 billion, easily surpassing the previous high of $282.2 billion from January 2000, said Richard Peterson, senior director, S&P Global Market Intelligence. He added that the last 30 days have seen more than 20 percent of year-to-date deal value for announced U.S. M&A.

While the announced tie-ups of the year so far do lag the record levels of 2015, he said, "all deal activity will likely force (corporate) peers to consider similar action."

General Electric announced Monday an agreement to combine GE's oil and gas business with Baker Hughes for an expected combined revenue of more than $30 billion. In addition, CenturyLink announced it will acquire Level 3 Communications in a cash-and-stock deal valued around $34 billion, including the assumption of debt. Both deals are expected to close in 2017.

Analysts have generally attributed the surge in corporate deals to the rise in interest rates, as companies try to lock in lower financing costs ahead of further increases in borrowing costs. Global benchmark yields rose to multimonth highs last week as sentiment around major central banks' policies turned less stimulative than it has been.

The search for growth in acquiring other companies has also picked up as economic growth appears moderate but steady, allaying first-quarter fears of a U.S. recession. On Friday, the first read on third-quarter U.S. GDP showed a 2.9 percent annual growth rate, the fastest pace in two years.

"Amid the current economic and political uncertainty as we near the end of a never-ending election season, companies are aware that policy changes will soon be implemented early next year and are yearning for opportunity to have a bigger presence in a market where domination and competition are vital," said Michael Bapis, managing director, The Bapis Group at HighTower.

To be sure, the announced deals still face regulatory hurdles, and may not necessarily benefit the combining companies. The previous record month of U.S. announced deals in January 2000 was when AOL bought Time Warner in what is the biggest corporate tie-up to date and, by some measures, the worst in history.