Buffett: Cheap debt behind M&A 'purchasing frenzy'

'It is insane to risk what you have and need in order to obtain what you do not need'

Mike Sheen
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 identify 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 irrelev...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Equities

Partner Insight: AI Decoded - Pioneering investment innovation with advanced AI techniques

Partner Insight: AI Decoded - Pioneering investment innovation with advanced AI techniques

Insights from AllianzGI's Systematic Equity Team on Random Forest, NLP, and more.

AllianzGI's Systematic Equity team
clock 22 July 2025 • 3 min read
London Stock Exchange eyes launch of 24-hour trading – reports
UK

London Stock Exchange eyes launch of 24-hour trading – reports

Amid growing demand

Cristian Angeloni
clock 21 July 2025 • 1 min read
Partner Insight: Playing Defence with Dividends

Partner Insight: Playing Defence with Dividends

Today’s equity markets are characterised by bouts of volatility, spurred by geopolitical tensions and macroeconomic uncertainties, mainly due to the start-stop nature of the US-initiated global trade war. This has investors seeking strategies that offer...

Reineke Davidsz and Najib Nakad @ VLK Investment Management
clock 10 July 2025 • 3 min read
Trustpilot