Merger Mania

Given slow growth, low interest rates, firms with record cash holdings and high stock prices, the record $650 billion in mergers and acquisitions announced YTD isn’t surprising. It’s safer to buy than build, and if done right, mergers boost profits by eliminating redundant staff. However, in the short run, mergers rarely lead to employment growth or plant construction, thereby limiting the financial gains to investors and not the labor market.

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