Cash-rich tech companies avoid M&A path

A handful of the largest US technology companies have increased their cash mountains by 40 per cent over the past year, taking their reserves to nearly a quarter of a trillion dollars, according to figures released in recent days. Conservative balance sheet management in the face of economic uncertainty and the failure of an anticipated wave of mergers and acquisitions to materialize have resulted in a massive build-up of liquidity among a small group of leading companies. The 10 largest tech companies added more than $65 billion to their reserves since the depths of the slump a year ago, according to a Financial Times analysis. That has come in spite of declining revenues over that period at companies such as Microsoft, Cisco Systems and IBM. Rising competition in some big tech markets, such as mobile computing, has also led the largest companies to hoard reserves, led by Apple, now the richest tech group with nearly $42 billion in cash and investments.