By John Kell and Alan Murray
June 17, 2016

Revlon announced after the markets closed yesterday that it is buying rival beauty firm Elizabeth Arden in an all-cash deal that values Arden at about $870 million.


The deal is just the latest, and certainly nowhere near the largest, of a string of mergers and acquisitions announced in recent days and months. Technology leads the way, with $267.6 billion in deals announced so far this year, according to Dealogic. Microsoft’s deal to acquire LinkedIn was this week’s big news; yesterday, we learned that Salesforce was also in the LinkedIn bidding.


What’s driving all this activity? It’s an unusual mix of economic circumstances, including sluggish economic growth, interest rates near zero, a sideways moving stock market, private equity eager for exits, and abundant corporate cash. When we surveyed Fortune 500 CEOs last month, 76% reported that “my company has all the cash it needs to fund investments in the future,” while only 24% said they “need to borrow money to fund investment.” That’s created an environment where big companies are eager to spend, smaller ones are eager to sell, and investment bankers are having a hard time getting to the Hamptons on weekends.


Speaking at a Bloomberg technology conference this week, investor Marc Andreesen said the trend will continue, particularly in tech. “We see more M&A in the pipeline – meaning companies in consideration or negotiation – than we have in the last four years.” He expects “a run of M&A the rest of this year and next.” Investors seem to believe Twitter is next on the auction block.


More news below. Enjoy the weekend.


Alan Murray


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