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.