Cash-Laden Companies Are on a Mergers and Acquisitions Spree
Summary
Businesses spent $1.74 trillion on mergers and acquisitions involving U.S. companies during the first six months of the year—the highest amount in more than four decades—as finance chiefs tapped into cheap funding options to acquire technologies, services and other assets. U.S. companies are cash-rich thanks to last year’s emergency fundraising rounds and strong earnings in recent quarters, providing chief financial officers with money to fill gaps in their portfolios. “The market is clearly hot,” said Luca Zaramella, the chief financial officer of snack-foods maker Mondelez International Inc., which in May agreed to spend about $2 billion on Chipita SA, a European snacking company. Mondelez plans to finance the transaction with new debt, existing cash and $1 billion it received after selling down part of its stake in Keurig Dr Pepper Inc. “The cost of capital is pretty compelling,” Mr. Zaramella said. Software firm Autodesk Inc., which used existing cash on its balance sheet for two deals totaling over $1 billion this year, plans to keep investing, CFO Debbie Clifford said.