Global mergers and acquisitions could set a record this year of close to $4.6 trillion, according to data provider Dealogic. This would exceed the $4.3 trillion reached in 2007, the previous record year for deal making, and the prospect for continued deal activity remains robust now that the Fed has delayed an increase in interest rates.

What are some of the trends that have boosted mergers and acquisitions?

¦ After years of cost-cutting, companies are searching for ways to boost growth in a sluggish economic environment. According to FactSet, profit growth among companies in the S&P fell about 1 percent in the second quarter. Sales growth declined some 2 percent in the first half of the year. Acquisitions provide a way to offset this trend. Combining two companies in similar industries not only increases top-line growth, but encourages bottom-line improvements from cost cutting to reduce redundant staff and research activities.

¦ The current low-interest-rate environment has encouraged companies to borrow or use cash for tie-ups because acquisitions can easily be structured so they add to earnings. Because cash earns virtually nothing, a company can purchase another firm to boost earnings.

Brian Angerame, a portfolio manager at Clear Bridge Investments, emphasized the possibility that the Fed might begin tightening soon: “You also feel this creeping sense of urgency in the back of your mind because you fear that you might not be able to get interest rates this low for some period of time.”

¦ The prospect for a stable economic environment has raised executives’ confidence that they can benefit from sound business decisions over the investment cycle.

Major deals in 2015

The following tie-ups are horizontal mergers — business consolidations between firms that operate in the same space, offering on a competitive basis similar goods and services.

¦ CVS to acquire Omnicare for $12.7 billion.

¦ Intel to acquire Altera for $16.7 billion.

¦ Charter Communications to acquire Warner Cable for $78.7 billion.

¦ Last week, Anheuser-Busch, the world’s largest brewer, confirmed it had approached SABMiller’s board of directors regarding a combination of the two companies. The price tag to acquire SABMiller would exceed $100 billion.

The busiest sectors

The revolution in social, mobile, analytics and cloud, otherwise known as SMAC, has forced technology players to adapt. Companies are using acquisitions to expand their product lines, develop domain expertise or enhance their growth prospects. Intel’s $16.7 billion acquisition of Altera Corp. boosted Intel’s position in server systems. Avago Technologies acquired Broadcom, a global leader in digital semiconductor solutions for wired and wireless communication, for $37 billion.

The deal-making explosion of M&A activity in the pharmaceutical sector has transformed that industry. According to consulting firm KPMG, $221 billion in deals were done in the first half of 2015. With today’s breakthrough medicines, it is sometimes cheaper and faster to acquire the next blockbuster drug than to develop it in-house. Teva acquired rival generic drugmaker Allergan to reduce competition from smaller generic players and to cut costs by slashing overlapping divisions and staff.

The global telecom industry witnessed a wave of consolidations as firms fought for bigger market shares and tried to offset lower revenues from their existing businesses.

But will they succeed?

Despite the promised benefits of mergers, academic research indicates that most acquisitions during buyout booms, such as the one occurring now, are more likely to fail than those made in other periods.

Success is more likely if the merger has a strong strategic rationale, such as buying companies that meet product-line and growth plans. In addition, success can be greatly increased if there is deep industry experience, understanding of corporate cultures and an appreciation of how cultures affect trans-border acquisitions.

Originally published in the Sarasota Herald-Tribune