The William Wrigley Jr, Company is a Chicago-based gum and confection company. It has lots of growing earnings, new products, and new locations. Back in April when stocks were very high (by today's standards), the Mars Corporation arranged to purchase the Wrigley Company for $23 billion in cash. The deal was set to close 6-12 months later.
By this fall, with the market down and people crying "credit crunch", it would seem that Mars might be tempted to back out of the deal -- perhaps to complain about credit even if were not really a problem. But Mars made no excuses: this Monday (October 6), Mars showed up on time with the $23 billion in cash. Much of that cash was borrowed. Mars now owns the Wrigley Company.
The lesson is that opportunities exist in the non-financial sector, and at least some of those opportunities are being realized despite the so-called credit crunch.
I am still digesting this, but the Executive Board seems to find that major corporations are NOT suffering from a credit crunch. Mr. John Haskell wrote me that his surveys show that "Most large companies are still in an extremely safe liquidity position; they have long-term credit facilities and large cash holdings." I have not reviewed those surveys myself, but will update if and when I do.
[Added Oct 13: Mr. Haskell elaborated further: "The Corporate Executive Board finds that large multinationals are using good times of past to buy themselves time – they have long-term credit facilities and large cash holdings. One of their recent polls found that more than 70% were not planning on proactively drawing down on their credit facilities, and that they believed they could still access 80-90% of their credit lines. Obviously the experience for the lowest rated CP issuers may be different, but most major corporations are not currently suffering from a credit crunch."]