Cheap debt behind M&A 'purchasing frenzy' - Warren Buffett

'Army of optimistic purchasers'

clock • 2 min read

Warren Buffett has identified "cheap debt" as the driver behind a "purchasing frenzy" of M&A activity, as prices for "far from spectacular" businesses hit an all-time high.

In his annual letter, the Berkshire Hathaway chairman did not pick out overvalued equity markets, as he has done in previous years, but said the active M&A environment had made prices "almost irrelevant to an army of optimistic purchasers". Buffett said his firm has been less active in pursuing large acquisitions this year as it sought "a sensible purchase price" in any such deal. He said: "That … requirement proved a barrier to virtually all deals we reviewed in 2017, as prices for decent, but far from spectacular, businesses hit an all-time high. "Indeed, price seemed almost irre...

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