Merger boom shows no sign of slowing

NEW YORK, Dec 18 (Reuters) Merger proposals worth at least $82 billion were announced around the world on Sunday and Monday as the record year for M&A Values continued apace.

Among the bigger deals, Norway's Statoil agreed to acquire the oil and gas activities of Norsk Hydro for $30 billion, and U.S. pharmacy benefits manager Express Scripts Inc. offered to buy rival Caremark RX for $26 billion.

The global mergers boom has been driven by low interest rates, gains in stock markets, and liberal credit markets. Also fueling M&A have been private equity funds, also known as financial sponsors.

At least three of the latest transactions involved private equity groups.

Orthopedic device maker Biomet Inc. agreed to be acquired by a private equity consortium for $10.9 billion. Real estate firm Realogy Corp. agreed to be bought by private equity firm Apollo Group for $6.65 billion plus debt and other liabilities.

And roofing products maker ElkCorp agreed to be taken private by buyout firm Carlyle Group in a $1 billion deal.

One expert said the merger boom should continue.

''I don't see any reason why it should calm down,'' said Brian Sterling, co-head of investment banking at Sandler O'Neill & Partners.

''The same drivers of transactions -- the state of the economy, the state of the industries, and all the macro and micro trends related to them -- don't look like they are going to change through year-end.

''We expect volume of activity to continue.'' APPETITE FOR DEBT High-yield bond investors have also helped boost M&A activity by snapping up new debt issues at a record pace this year, allowing private equity firms to finance some of the largest buyouts in history.

Research firm Dealogic said earlier this month the volume of mergers and acquisitions by private equity firms and other financial sponsors so far this year hit a record at over $626 billion, up about 90 percent from a year earlier.

Further, private equity firms have raised about $300 billion in new funding worldwide this year, according to research by Private Equity Intelligence.

The proposed transactions of Sunday and Monday will take the value of global mergers for 2006 to an all-time high of over $3.8 trillion, according to Dealogic. The previous high was $3.332 trillion in 2000.

This year's biggest deals include AT&T Inc.'s proposed acquisition of BellSouth Corp. for roughly $80 billion in the United States, and the roughly $47 billion offer by German utility E.ON for Spanish rival Endesa.

REUTERS PKS BST0043