M&A deals on track for record year

NEW YORK – Blue chip stocks might have just suffered their worst quarter in two years, but that didn’t stop Wall Street’s army of investment bankers from putting together deals at a record pace.

High-profile transactions such as the $31.8 billion takeover of energy company TXU Corp. have helped U.S. acquisitions surge 21 percent from last year.

In the first quarter of 2007, there were $428.69 billion worth of deals, according to research firm Dealogic. Globally, that number surged 15 percent to $1.13 trillion – and is on track to surpass last year’s $4 trillion record.

The number of deals has weakened year over year, with the amount falling to 1,397 from 2,012 in 2006.

But what has helped maintain the level of mergers and acquisitions in the U.S. is that the economy hasn’t fallen in lockstep with the stock market. In fact, this past week’s economic data showed that gross domestic product is in better shape than expected.

Investment banks also have been able to rely on a steady stream of deals coming from outside the U.S. And there’s no denying the impact private equity firms had on driving the pace of deals during the first quarter.