Soup Du Jour: Merger-Arb ETFs

zachsMergers and acquisition activities across a number of sectors are picking up rapidly this year. Continued low interest rates are making borrowing cheaper and allowing companies to shore up their balance sheets. This suggests optimism over the global economy.

As per Dealogic , the value of mergers and acquisitions across the globe has risen 13% so far this year to $552.4 billion with 4,880 deals. This represents the highest level since the pre-financial crisis level of 2007. U.S. deals make up for nearly three-fifths of the value while China accounts for less than 10% of the deal value.

Hot Deals

The telecom space so far has been at the forefront with the $45.2 billion takeover of Time Warner Cable ( TWC ) by Comcast ( CMCSA ). The transaction, pending shareholder and regulatory approval, is expected to complete by the end of this year (read: 3 ETFs to Watch on Comcast-Time Warner Cable Deal ).

The second biggest deal comes from generic drug maker Actavis ( ACT ), which agreed to acquire Forest Laboratories ( FRX ) for $25 billion. The deal is expected to close in mid 2014 subject to regulatory approval.