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M&A Fever: Suddenly Huge Companies Have Started Buying Each Other Again

Daily Ticker

For the last several years, America's biggest corporations have focused on surviving the recession, streamlining their operations, and avoiding big risks or mistakes.

The companies have also watched mountains of cash build up on their balance sheets, thanks to their spectacular profitability. Companies traded on the S&P 500 are sitting on roughly $1 trillion in cash.

All this cash, combined with an ongoing environment of slow revenue growth, cheap financing, and a stabilizing economy, has led many market observers to wonder when a new merger and acquisitions boom would finally kick off.

Well, it seems that the answer might be "now."

Last week saw the announcement of two huge deals: The American Airlines-US Airways $11 billion merger and Warren Buffett's purchase of Heinz for roughly $283billion. And these deals following closely on the heels of Dell's announcement that it is taking itself private, as well Liberty Global's purchase of Virgin Media.

Related: US Airways Merges With American Airlines: What Consumers Need to Know

Data by Thomson Reuters shows merger and acquisition activity is up two times as much so far this year compared to the same period last year at about $159 billion.

So is this it--the start of a huge new M&A boom that will see dozens of massive corporations gobble each other up?

Yahoo's Michael Santoli and I discuss that question in the accompanying video.

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