A new merger wave may be forming, with lots of companies’ shares still at relatively cheap prices

THERE is nothing like a good bidding war to lift capitalism’s spirits. And that may be exactly what is about to happen after Kraft made a $17 billion bid for Cadbury on September 7th. The venerable British confectioner rejected out of hand the American food giant’s offer, saying it “fundamentally undervalues” the company, which could continue to thrive on its own. Kraft’s management said it would be disciplined, but intended to pursue a hostile bid. This triggered speculation that other big food companies, such as Nestle, Hershey and Mars, might enter the fray, perhaps as a “white knight” that would help Cadbury maintain its independence—or, at least, give it up on more advantageous terms.

Kraft’s move is one of several in recent days that have raised hopes of a new wave of mergers and acquisitions just as it seemed, after a summer of inactivity, that 2009 would be a moribund year for M&A. On September 8th Deutsche Telekom and France Telecom said they would merge their British mobile-phone operations, respectively T-Mobile and Orange, to create a new market leader. The same day Vivendi of France said it was buying GVT, a Brazilian mobile-phone firm, for €2 billion ($2.9 billion). On August 31st Disney bought superhero factory Marvel Entertainment for $4 billion, and Baker Hughes offered $5.5 billion for its fellow Houston-based energy-services firm, BJ Services. The next day eBay sold a 65% stake in its internet-phone unit, Skype, for $1.9 billion, to a group of private-equity investors. …