Although corporate balance sheets are getting stronger, companies still prefer little snacks of companies and lack the appetite for large $1B+ deals. Much more is at risk for a large deal to be done, so often under the boards supervision they are much more open to doing smaller, bolt on deals that lack the financing and integration risk. Large deals need years before a payout can be seen and banks are still nervous about going back to the lax lending standards of the 2007 era. Another component that is coming into play in 2012 is the uncertain political environment: President Obama has made it clear that tax changes are coming, and banking regulation is still in motion with capital ratio requirements edging upward with Basel III regulation.
Nonetheless, this is still good news for the 97% of companies that are expecting a price tag of under $1 Billion. The stock market is moving upward and companies trading hands today are viewed as value plays.