It's a merger and acquisition party, and everyone's invited.
Aussie investment firm Spark Infrastructure has a market cap of around $7.4 billion. While you might not know who the folks at Spark are, they own and manage some big-name electricity infrastructure assets like SA Power Networks, TransGrid and CitiPower.
They've just agreed to a $5.2 billion buyout by three overseas private equity firms: KKR & Co Inc and two Canadian pension funds.
They're the latest in a string of mergers and acquisitions over the last few months thanks to record-low interest rates.
So what's the key learning?
Low interest rates = M&As all round, Flux fam.
Just like we need loans to buy a house, companies often need loans to buy other companies. And just like our loans depend on interest rates, so do theirs.
Think about it, a high-interest loan repayment can impact a company's cash flow. Which then impacts the returns a company's investors receive. So when interest rates are low, companies can look at M&As without risking their bottom line.
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