US merger wave surges ahead of presidential election

US companies significantly accelerated merger and acquisition activity in October ahead of the finale of a hard-fought presidential election campaign that has financial markets on edge.

In the latest examples of mega deal-making, US telecom group CenturyLink on Monday announced it was acquiring Level 3 Communi-cations for $34 billion including debt, while General Electric unveiled plans to merge its oilfield unit into Baker Hughes, with an implied current market value of the merged company of $45-50 billion.

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The two deals, plus a slew of takeovers unveiled earlier in the month, came as the close and contentious US presidential campaign between Republican Donald Trump and Democrat Hillary Clinton entered the homestretch. The outcome could have major implications for key US economic policies, including international trade and taxes.

Markets are also gearing up for a likely move by the Federal Reserve to increase interest rates in December, which would raise the cost of debt. Investment bankers highlighted the prospect of higher interest rates down the road as they prodded companies to pull the trigger on deals.

"Now the pitch is 'Fund your deal with debt... Rates will never be lower!," said a note from Convergex chief market strategist Nicholas Colas.