Deal Activity Will Mirror Overall Economy: BofA Exec 

There was an expectation earlier in the year that 2010 would be a very strong M&A (mergers and acquisitions) year. Some would say, so far, things have been disappointing. Others point out, it has gained steam.

"Now you are starting to see a pick up in deal activity, M&A is up 39 percent this year," Stefan Selig, executive vice chairman of global corporate investment banking at Bank of America Merrill Lynch, told CNBC on Thursday.

"The pick up in deal activity will be gradual to mirror the overall economy, Selig said.

On the other hand, private equity deals have been twice as active as they were last year—$90 billion dollars in deals year-to-date, he said.

"But they've been the $3, $4, $5 billion dollar deals. You've seen Gymboree, you've seen Burger King, you've seen Del Monte last week at $5.3 billion dollars, which was the biggest LBO (leveraged buyout) since the financial crisis," Selig said.

"But you haven't seen the mega-deals, the $10, $20, $30 billion-dollar deals," he said, adding, "because there is not the depth in the debt markets to support those sorts of deals."

"You also have unbelievably attractive debt markets with interest rates at all-time lows. So even not accessing your own cash, you can borrow money like you've never been able to borrow money before," Selig said.

"As long as interest rates remain at these low levels, you're going to see a lot of these sorts of deals. You're just not going to see a return to the size of the deals that we saw at the height of the financial peak," he said.


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