×

'Different Twist' on M&A Activity

The unexpected uptick in M&A activityhas caused many to speculate that we are about to have a pretty active season, especially because of the tremendous amount of cash on corporate balance sheets.

However, this is different from the period we saw where "activists were pushing to break-up companies, leverage up companies. This will be a different twist with potentially 'X' amount of cash is enough," Leon Kalvaria, vice chairman of Citi institutional client group at Citigroup, told CNBC's The Strategy Sessionon Tuesday.

"What we have right now is well over a trillion dollars in cash that has accumulated during this difficult time in the last couple of years. The issue now becomes how much cash on corporate balance sheets is too much?," Kalvaria said.

In this low interest rate environment, the Citigroup executive thinks we may start to see activity that has companies using their cash to invest in their businesses, for mergers and acquisitions, or giving to shareholders (in the form of dividends.)

"Last year was more about survival, now everyone knows we have survived. The question is how long will it take us to thrive? We have certainly moved forward here and we will slowly start to see this activity," Kalvaria concluded.