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Merger Bubble May Burst as Record Goodwill Piles Up: Real M&A

  • S&P 500 members carry $2.5 trillion of goodwill, a new high
  • Overpriced acquisitions could lead to future writedowns
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The biggest threat to U.S. stocks right now may not be China, currencies or commodities prices. It might be American companies’ own merger appetite.

Acquirers worldwide have already spent $2.2 trillion on transactions in 2015, putting the year on track for a record. The buying spree has been particularly audacious in the U.S., where acquirers are offering record prices relative to the revenue and profit they’re gaining from the deals.