The third (and final?) article in the Wall Street Journal’s series on the Savings Glut, by Dennis K. Berman and Jason Singer, is a bit of letdown. It covers the well-trod ground of the effect of excess cash on corporate mergers and acquisitions.

Besides market acceptance, the merger boom reflects growing hunger for deals in Europe, low interest rates, eager bank lenders and a corporate cash stash that now represents 10% of all corporate assets — the highest level in 20 years, according to Morgan Stanley. Moreover, even though the Standard & Poor’s 500 Index has been virtually flat this year, executives and directors of acquirers express confidence in the economy.

This theme extends to the piece by Andrew Bary in Barron’s that notes one of the side effects of this Savings Glut is the record accumulation of cash on the balance sheets of American corporations. This accumulation of cash is becoming a contentious issue with hedge fund activists who are calling for the return of cash to shareholders. In addition, this excess cash provides fodder for potential LBOs. While ample balance sheet cash can gird valuations, it is a double-edged sword. Just as cash can be used for the benefit of shareholders it can also be dissipated in questionable acquisitions and investments.

You can read our take on the first two articles in the series here, and here.