Merger and acquisition volume could reach $4 trillion globally this year, trailing only 2007’s record.

This time, America is much more active in deal making than Europe. The weaker countries in Europe are holding back that region’s activity now, but in 2007 Europe was more active than the Americas.

What has caused the surge in consolidations? A combination of low interest rates, the surging stock market, confidence about the economy’s prospective growth rates, and companies’ large cash holdings have all contributed. In addition, companies want to quickly enhance their market power, acquire new resources, enhance their profitability and overcome barriers to entry.

“Executives in all sectors are saying: ‘We have a good stock price, a good financing market and our business is well in hand. It’s time to think about something more expansive, like M&A,” said Blair Effron, co-founder of Centerview Partners, whose company has worked on some of the largest mergers in recent years, including the combination of Kraft Foods Group and H.J. Heinz.

Heinz and Kraft announced a merger March 25 that would create the world’s fifth-largest food-and-beverage company. Their goals are to reduce costs and enhance their international growth opportunities.

“This massive merger, valued at about $36 billion, will allow Kraft to move and grow faster than we could on our own,” said Kraft CEO John Cahill, who will become vice-chairman of the newly formed Kraft Heinz.

Last week alone:

In the health sector, Mylan NV announced a $28.9 billion takeover for a competitor, Perrigo Co.

In the energy field, Royal Dutch Shell said it is acquiring BG Group for $74 billion, creating the world’s largest independent producer of liquefied natural gas. A combined Shell and BG will have daily production of 4.2 million barrels of oil equivalent a day by 2018. At that time, the combined firms expect to produce more than the current kingpin, ExxonMobil.

Energy analysts point out that, given the present-day weakness in the oil market, any oil company could consolidate for the following reasons:

Companies feel that tie-ups might make them less vulnerable to low oil prices.

The steep decline in the price of stocks in the energy sector makes acquisitions more affordable. BG shares had fallen 30 percent before Shell’s acquisition announcement.

Wall Street welcomes mergers, especially since other revenue sources such as bond trading are under pressure. The recently announced Shell-BG Group megadeal will generate total adviser fees above $100 million.

The strength of the dollar might spur growth in the pace of Europe’s M&A activity. The dollar’s rise was one factor behind FedEx Corp.’s agreement to buy Dutch package-delivery company TNT Express for $4.8 billion. The strength of the dollar hurts American companies’ ability to sell their products overseas, but it makes acquisitions outside of the U.S. less expensive.

While I love making profits when one of my stock holdings jumps in price after a takeover announcement, I have concerns.

Specifically, while I understand the limitations of driving while looking in the rear-view mirror, I shudder when I think of the years since the record consolidations of 2007.

Mergers are not a cure-all for the slowdown in the global economy. Meshing companies with disparate cultures, technology and other systems can be harder than expected. Large job cuts frequently accompany such tie-ups. And mergers can blunt the competitive forces necessary to ensure on-going product innovations and pricing fairness.

In conclusion, while companies are very eager to take advantage of today’s favorable environment to jump-start growth through takeovers, I worry that today’s easy-money environment could spur reckless behavior.

Originally published in the Sarasota Herald-Tribune