. November 26, 2006 SouthAmerica: Global mergers and acquisitions are sky high in 2006 â and such activity has helped push the value of global mergers and takeovers announced this year above the $3.33 trillion record set in 2000 ******* Mergers and acquisitions âPartying like it's 1999â Nov 23rd 2006 | NEW YORK From The Economist print edition Deal-making is breaking records, but thankfully it's not dÃ©jÃ vu yet IT WAS not the first day to be dubbed âMerger Mondayâ but it was one of the more spectacular. In a frenzied 24 hours on November 19th and 20th, firms announced some $75 billion-worth of deals. There was no let-up for ebullient bankers as the week wore on: Qantas, Australia's flag-carrying airline, said it had been approached by a group led by a bank and a private-equity firm, possibly valuing it at up to A$11 billion ($8.5 billion). Such activity has helped push the value of mergers and takeovers announced this year above the $3.33 trillion record set in 2000 at the apex of dotcom mania. But several things distinguish this merger boom from the last one. First, deals are less skewed towards America. Its share was 46% of global volume in 2000 but is now down to 37%, slightly below Europe's, which is rising strongly, according to Dealogic, a data provider. Asia, though still far behind, is narrowing the gap. And no single industry is miles ahead of the rest, as telecoms and high-tech were last time. This week's biggest deals and bids were spread among industries as diverse as property, copper, aviation and financial exchanges. Mergers are also structured differently these days, with cash largely replacing stock as the preferred means of payment. Cheap credit has become the market's main driver. With interest rates low, it has become easier for companies to finance themselves with debt than with equityâlast time, it was the other way around. This has fuelled the boom in buyouts, which now account for almost a fifth of all takeovers. This week's biggest bid, Blackstone's offer of $36 billion including debt for Equity Office Properties, a real-estate trust, sets a new record in the field. (The old one was only four months old.) Debt has become key even in traditional-industry consolidation: a $26 billion takeover that will create the world's largest listed copper producer, also announced this week, is structured as a leveraged reverse takeover. The complacency bred by easy money and calm times (defaults on high-yield bonds are at their lowest level in a quarter of a century) has led to fears of a bloodbath if the market suddenly turns. Yet those who work on mergers remain sanguine. Gordon Dyal, global head of M&A at Goldman Sachs, points out that although dealmaking is at a record in dollar terms, it is much lower than six years ago as a percentage of overall stockmarket capitalisation. And corporate profits have risen by more than share prices, so earnings multiples are also less frothy than last time. Tellingly, Goldmanâthe number-one merger adviser every year since the last boomâcontinues to see the business as âmission-criticalâ, in Mr Dyal's words, even though it makes much more money these days trading securities. That is partly because M&A leads to more ancillary work than it used to: with debt so ubiquitous, merging companies want loans, bonds and more complex structured finance on top of any advice they receive. In one way the current wave has already turned nasty: there has been a proliferation of unsolicited bids. The mergers of the dotcom era were mostly love-ins: only 2% of those unveiled in 2000 were deemed hostile. By 2005 the proportion had gone up to 10% and it has continued rising this year, to 11%. In the past fortnight, US Airways has tried to woo Delta, and NASDAQ has launched its latest attempt to buy the London Stock Exchange. One reason for this increased aggression may be the growing influence of shareholders whose patience is short, notably hedge funds. Even if the market stays healthy, expect plenty of fireworks. .