Thanks to record low interest rates, an easier corporate lending environment and corporate cash coffers swelling, merger and acquisition activity picked up steam in 2010. Across various industries and companies both public and private, deal making came back in 2010.

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The Return Of Private Equity
After a quiet couple of years thanks to the freezing of credit markets, private equity deals were very active in the M&A space in 2010. The most recent deals included the $5 billion buyout of consumer foods and pet products company Del Monte Foods (NYSE:DLM) by a private equity consortium led by KKR & Co. (NYSE:KKR). Unless another private equity deal emerges in the coming weeks, Del Monte's buyout will be the largest leverage buyout in 2010. A few days later, two private equity firms announced the $3 billion buyout of retailer J. Crew (Nasdaq:JCG). In fact, during the last week of November, more than $10 billion in private equity buyout deals were announced, the busiest such week since the good old days of 2007.

Corporate Consolidation
Looking for ways to use increasing cash piles, corporations took advantage of attractive equity prices to buy out competitors or quality assets on the cheap. Leading discount airline Southwest (NYSE:LUV) announced a deal to buy out smaller rival AirTran (NYSE:AAI). After more than a year of struggle, fertilizer producer CF Industries (NYSE:CF) finally won out in its offer to acquire smaller nitrogen rival Terra Industries. CF Industries and Canada's Agrium (NYSE:AGU) were battling over Terra beginning in 2009, and CF finally prevailed in April 2010.

Strategic Division Buyouts
In addition to buying out entire businesses, companies were buying out strategic divisions from other competitors. One of the biggest in 2010 was MetLife's $15.5 billion deal to buy AIG's American Life Insurance Co., or Alico. Overall, M&A activity was brought back to life in 2010. As the economy recovered, investors came back with a little confidence aided by a huge appetite for debt despite record low interest rates. (For more, see What Makes An M&A Deal Work?)

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Tickers in this Article: DLM, JCG, LUV, AAI, CF, AGU, MET, KKR

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