Despite pharma deals, M&A is still scarce

Pharmaceutical companies have spurred a merger mini-boom over the past couple weeks. Led by Merck (MRK), which agreed earlier this week to buy Schering-Plough (SGP) for $45.9 billion, and Pfizer (PFE), which announced it would purchase Wyeth (WYE) for $64.5 billion last month, drug makers are the only bright spot in the otherwise dark world of corporate deal-making.

M&A activity is far below its peak in 2007 -- and still falling, thanks to the souring economy and turbulent markets. There have been $350.5 billion worth of M&A transactions worldwide so far this year, according to data compiled by Thompson Reuters. It's a staggering sum, to be sure, but it marks a decline of 10 percent from last year and a huge 50 percent dropoff since 2007. Meanwhile, mergers between drug companies have seen a nearly five-fold increase.