Don’t Be Fooled by a Lull in M&A Activity, More Deals Are on the Way

March 31 - Money Morning - The U.S. buyout market is about to enter a new phase, as corporate takeovers pick up where private-equity firms left off last fall.

The deal-making market is a key to the health of the U.S. stock market. During much of 2006 and 2007, it was the steady stream of private-equity buyouts and corporate mergers and acquisitions (M&A) deals that propelled the key U.S. stock indices to one record high after another.

When the deals are flowing, investors are willing to pay more for their shares, figuring the odds for a nice payday are higher. And the deal market was white-hot through the middle half of last year. Private-equity firms had amassed huge war chests. They were buying stakes in big companies and were buying smaller companies outright. Read More.