Dealmaking is back on the agenda as CEOs step up the hunt for ways to put a multitrillion-dollar cash pile to work, triggering the busiest January for M&A in 11 years.

There is still plenty to worry about at this year's meeting of the global elite in Davos, from fiscal deficits in the developed world to inflationary risks in emerging markets to new political risks like Egypt.

But with economic recovery taking root in the United States and Germany, while China and India continue to barrel along, company bosses and dealmakers are no longer willing to sit pat.

"We're seeing our clients beginning to invest," said Jim Quigley, CEO of Deloitte Touche Tohmatsu. "There is significant capital still on the sidelines, but my M&A team is certainly no longer on the sidelines."

Overall, multinational companies in developed countries are holding a record $4-5 trillion in cash, according to a report last week by the United Nations Conference on Trade and Development.

That money was built up as a buffer against a potential double-dip recession, or other systemic shocks, and it is beginning to look like a wasted opportunity.

The mood of confidence - as measured by surveys and conversations with business leaders - is palpably better at this year's annual meeting of the World Economic Forum.

Fair Conversations
"Equity valuations are coming back. There are more fair conversations between buyers and sellers," said one European dealmaker.

Some companies have already plunged into M&A, like U.S. health insurer Humana, which last month completed the $790 million acquisition of Concentra, a Texas-based care provider.

"Clearly, cash has to be put to work. It can't just sit on the balance sheet," said Humana Chief Executive Mike McCallister. "We will continue to look for more opportunities."

He is not alone.

Global M&A activity so far this year has already reached $243 billion, making it the most active January since 2000 and 47% ahead of the $165 billion for all of January 2010, according to Thomson Reuters data.

"M&A is back and the volume of deals in the last few months has certainly picked up. But our survey also points (out) that the whole area of innovation is also back, which I think gives the best of all worlds," said Denis Nally, chairman of PricewaterhouseCoopers (PwC).

PwC's annual CEO confidence survey, released on Tuesday, showed optimism among CEOs had returned to almost the same level as before the financial crisis, with 48% of those questioned very confident about 2011 revenue growth.

Kissing Frogs
"This is a good moment for M&A deals," said Feike Sijbesma, CEO of Dutch group DSM, the world's largest vitamins maker.

DSM last month agreed to buy U.S. baby food ingredients maker Martek Biosciences for $1.1 billion and, with more than $2.5 billion available for acquisitions, Sijbesma hasn't finished shopping yet.

A string of other companies also flagged their interest in acquiring rivals to drive their growth to the next level this week in Davos, including German software maker SAP, French outdoor advertising group JCDecaux, Russia's largest steel producer Severstal, India's No. 2 software exporter Infosys Technologies and Swiss drugmaker Novartis.

"The tectonic plates are moving and good companies need to be in the game, engaging in global M&A activity," said Mark Foster, Accenture's global head of management consulting.

Finding the right deal, however, remains as tricky as ever, according to Chris Viehbacher, CEO of French drugmaker Sanofi-Aventis, who is locked in a closely watched takeover battle for U.S. biotech group Genzyme but is also open to other smaller deals.

"You've got to kiss an awful lot of frogs to buy a prince," he said.