Japanese beverage company Suntory Holdings announced on Monday that it will acquire Beam (BEAM.DL) in a transaction valued at $16 billion. This is not the only major deal announced in the past few days. Search engine giant Google (GOOGL 0.35%) has also entered into an agreement to acquire Nest Labs. Meanwhile, Charter Communications (CHTR 0.73%) has proposed a merger with Time Warner Cable (NYSE: TWC). Given the spate of deals announced in the first two weeks of 2014, could M&A activity finally rebound after remaining flat in the previous year?

M&A activity remained subdued in 2013
Although several big deals were announced in the first few months of 2013, total deal value actually fell in 2013. According to Mergermarket, deal value dropped 3.2% to $2.21 trillion in 2013, marking the slowest year since 2010. M&A activity in 2013 followed the trend seen in the previous two years, when deal major deals were announced in the beginning of the year but activity slowed down as the year progressed. Last year's figures were also disappointing, given the fact that they included one of the biggest M&A deals ever, Verizon's acquisition of Vodafone's 45% stake in Verizon Wireless.

The disappointing M&A activity can be blamed on the economic uncertainty. Although the U.S. economy continued to improve last year, there was a great deal of anxiety surrounding the budget deal and the Federal Reserve's bond purchases. The stalemate in Washington also led to a government shutdown, hurting business confidence. In addition, there were also concerns over a slowdown in China, the weakness in the eurozone, and a mini-crisis in some emerging markets.

2014 off to a strong start
Similar to the trend seen in the past three years, M&A activity has been off to a solid start in 2014. On Monday, Suntory announced that it will acquire all outstanding shares of Beam for $83.50 per share in an all-cash transaction. Suntory's offer represents a premium of 25% to Beam's closing price of $66.97 on Jan. 10. The Japanese company is paying a multiple of 20 times Beam's EBITDA for the year ended Sept. 30, 2013.

Google also announced a major deal on Monday. The Mountain View, Calif.-based company said it will acquire Nest Labs for $3.2 billion in an all-cash transaction. Larry Page, CEO of Google, noted that Nest Labs' founders have built a tremendous team that he is excited to welcome into the Google family.

Also on Monday, Charter Communications said it had proposed a merger with Time Warner Cable. In a letter to TWC, Charter proposed that the two companies immediately engage in discussions to conclude a merger agreement. TWC confirmed the merger proposal but said its board of directors had rejected the proposal, calling it "grossly inadequate." Rob Marcus, chairman and CEO of TWC, said the proposal significantly undervalued his company and would represent an EBITDA multiple of approximately seven times, which he deemed "well below past transactions in the cable sector." It will be interesting to see whether Charter raises the offer.

Even if the Charter and Time Warner Cable deal doesn't go through, there has been significant M&A activity in the first two weeks of this year. The big question is whether M&A activity will gain momentum as the year progresses or fizzle out like we saw in the last few years.

This might be the year M&A activity finally rebounds
Companies are cash-rich at the moment, and interest rates in the developed world are at record low levels. This is an ideal environment for increased M&A activity. It may be argued that this has been the case for the past few years, and still M&A activity has failed to pick up despite showing promise. However, the crucial difference this time is that global economic uncertainty has finally ended.

In the U.S., the economy has continued to rebound. Although Friday's nonfarm payrolls data fell short of expectations, it was a one-off. Most economic data in the recent past has suggested that the economy is strengthening. There has also been some good news from the eurozone. On Tuesday, Spain's finance minister said the Spanish economy likely grew 0.3% in the fourth quarter of 2013 -- the fastest pace in six years. While the eurozone is not out of the woods yet, the outlook for the region has certainly improved. The improved economic outlook, coupled with the budget deal in the U.S., is expected to boost confidence among businesses as the year progresses.

Overall, the conditions are perfect for an increase in M&A activity. After the false starts seen in the last few years, global M&A activity is likely to finally rebound in 2014.