Skip to Main Content
Mergers, Acquisitions, and Corporate Restructurings, 7th Edition
book

Mergers, Acquisitions, and Corporate Restructurings, 7th Edition

by Patrick A. Gaughan
December 2017
Intermediate to advanced content levelIntermediate to advanced
672 pages
24h 26m
English
Wiley
Content preview from Mergers, Acquisitions, and Corporate Restructurings, 7th Edition

CHAPTER TWOHistory of Mergers

IN MUCH OF FINANCE there is very little attention paid to the history of the field. Rather, the focus is usually on the latest developments and innovations. This seems to be particularly the case in the United States, where there is less respect for that which is not new. It is not surprising, then, when we see that many of the mistakes and types of failed deals that occurred in earlier years tend to be repeated. The market seems to have a short memory, and we see that a pattern of flawed mergers and acquisitions (M&As) tends to reoccur. It is for this reason that we need to be aware of the history of the field. Such an awareness will help us identify the types of deals that have been problematic in the past.

MERGER WAVES

Six periods of high merger activity, often called merger waves, have taken place in U.S. history. These periods are characterized by cyclic activity—that is, high levels of mergers followed by periods of relatively fewer deals. The first four waves occurred between 1897 and 1904, 1916 and 1929, 1965 and 1969, and 1984 and 1989. Merger activity declined at the end of the 1980s but resumed again in the early 1990s to begin the fifth merger wave. We also had a relatively short but intense merger period between 2003 and 2007.

What Causes Merger Waves?

Research has shown that merger waves tend to be caused by a combination of economic, regulatory, and technological shocks.1 The economic shock comes in the form of an economic ...

Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Start your free trial

You might also like

Mergers, Acquisitions, and Other Restructuring Activities, 10th Edition

Mergers, Acquisitions, and Other Restructuring Activities, 10th Edition

Donald DePamphilis
Corporate Finance, 6th Edition

Corporate Finance, 6th Edition

Pierre Vernimmen, Pascal Quiry, Yann Le Fur
The Merger & Acquisition Leader's Playbook

The Merger & Acquisition Leader's Playbook

Jeffrey P. Pritchett, George B. Bradt

Publisher Resources

ISBN: 9781119380764Purchase book