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Pro Analysis

Breakingviews: JPMorgan believes a $100 billion deal may happen

JPMorgan Chase headquarters, New York.
Stan Honda | AFP | Getty Images
JPMorgan Chase headquarters, New York.

There just might be $100 billion of cash looking for a deal. JPMorgan's global mergers chairman, Kurt Simon, recently dangled the audacious notion that the capital markets could fully finance a 12-figure acquisition. He didn't suggest such a transaction was in the works, though, and there aren't many plausible targets.

Simon's exuberance is understandable. A record $6.6 trillion of debt was raised globally last year, about half of it the investment-grade corporate variety, according to Thomson Reuters data. JPMorgan helped arrange more of these dollars than any other bank. And just over six months ago, Bayer clinched its takeover of U.S. seeds producer Monsanto in the largest-ever all-cash deal at $66 billion.

It's nevertheless a big leap to the sum Simon suggested among his "2017 predictions," even if he hedged it with a question mark. A scan of S&P 500 Index constituents turns up a few dozen companies in the $60 billion to $90 billion range, leaving room for a premium. Some, including DuPont and Time Warner, are already spoken for in deals. Others, such as Goldman Sachs and Starbucks, would be challenging takeover targets.