For Wall Street dealmakers, the billion-dollar bangers are back

• Mars, Verizon, and now possibly Qualcomm have been on the hunt for big acquisition targets.
• Data from LSEG indicates deals valued at $1 billion-plus worldwide are up 22% from a year ago.
• Wall Street executives have been bullish about the burgeoning pipeline for deals.

Dealmaking has yet to make a full recovery, but blockbuster deals, with prominent corporate names and billion-dollar-plus price tags, are mounting a comeback.

In just the past few months we've seen the candy king Mars gobble up Kellanova , the maker of Cheez-It and Pringles, for nearly $36 billion including debt, and the media giant Paramount Global, the owner of CBS and Nickelodeon, finally clinch a multibillion-dollar merger deal . The telecoms giant Verizon Communications, meanwhile, is buying Frontier Communications for $20 billion, including debt.

Even bigger megadeals could be on the horizon: Qualcomm is said to be stalking its chip rival Intel , which has a market value of nearly $104 billion.

Preliminary data compiled by LSEG indicates that so far this year there have been 425 mergers worldwide valued at more than $1 billion, up by 24% from the 2023 period. And there have been 25 "whales" — deals valued at greater than $10 billion — so far this year, up by 39% from the previous period.

The billion-dollar bangers are emerging even as the overall outlook is not that encouraging. The US election creates uncertainty about regulatory and economic policies for corporate chiefs. The wars in Ukraine and the Middle East pose additional risks .

While the surge in megadeals has helped lift the dollar value of deals worldwide so far this year by 17%, to $2.3 trillion, the number of mergers announced is down by 21% from the previous year, according to LSEG.

So what has revived what Wall Street refers to as the "animal spirits," at least when it comes to bigger targets?

Certainly, lower interest rates help. Lower rates reduce the cost of borrowing.

Wall Street executives have also pointed to pent-up demand among companies as the pandemic and its aftermath, with higher inflation and supply-chain disruptions, delayed plans to grow through mergers.

David Solomon, the chief executive of Goldman Sachs, the leading global M&A advisor, referred to a "backlog" of transactions during the firm's second-quarter earnings call this summer.

"From what we're seeing, we are in the early innings of the capital markets and M&A recovery," Solomon said. Merger activity, he noted, was still significantly below 10-year averages. "I think we've got another 20% to go to get to 10-year averages," he said, according to a transcript by AlphaSense.

Other Wall Street bank chiefs, like Ted Pick of Morgan Stanley and Peter Orszag of Lazard, have been bullish about the M&A pipeline.

A recent survey of more than 1,300 CEOs of big companies worldwide by KPMG supports the idea that corporations are growing confident about doing deals. Some 49% of US CEOs surveyed said they were likely to undertake acquisitions over the next three years.

Shareholder activists are also spurring deals as companies look to simplify and refocus, Bloomberg reported . It said its data showed at least $250 billion worth of spinoffs and asset sales this year.

"Markets and activists are keeping companies honest," Hernan Cristerna, JPMorgan's global chairman of mergers and acquisitions, told Bloomberg. "Executives want to preempt demands by exiting non-core assets that may fundamentally impair or distract from the performance of their core businesses."