Traditional oil companies are eyeing players in alternative energy, which should benefit from the federal largesse. Fuel refiner Valero agreed to buy parts of bankrupt ethanol producer VeraSun.
The recession-proof sector is sitting on huge piles of cash, which could trigger more offers like pharmaceutical giant Pfizer's $68 billion bid for rival Wyeth.
Banks and other firms rocked by the credit crisis may seek mergers of desperation to boost profits. Buyers may also pick up assets in bankruptcies such as that of Lehman Brothers.
The government's spending on defense is spurring demand in the sector. In January aerospace manufacturer Ducommun paid $46.5 million for DynaBil Industries, a titanium supplier.
Companies with plenty of cash are among the most active buyers in the market. Cisco Systems recently sold $4 billion of debt to fund purchases.