U.S. merger activity up 21%

U.S. merger activity in the first quarter surged 21% in value from a year earlier as private equity firms and corporate buyers shrugged off stock market volatility and poured money into sectors such as energy, real estate and financial institutions.

Globally, announced mergers reached about $1.2 trillion for the first three months, the strongest first quarter ever and only the third time quarterly merger-and-acquisition volume has exceeded $1 trillion, according to research firm Dealogic.

First-quarter merger volume in the U.S. totaled $428.7 billion, compared with $352.1 billion a year earlier, Dealogic said. But as the total dollar value of the deals rose, the number of transactions fell to 1,397 from 2,012 a year earlier.

“We’re in a very strong M&A; market. There’s a good probability we’ll have a record year,” said Jeffrey Raich, joint global head of M&A; at UBS.

First-quarter merger volume in the U.S. slipped about 11% from the fourth quarter of 2006 as weakness in the stock market contributed to a slight pause in deal making, bankers said. Yet merger activity rebounded quickly because of the overall health of the economy and the availability of money at favorable rates, bankers said.