Читать книгу Applied Mergers and Acquisitions - Robert F. Bruner - Страница 73

Following the 1990–1991 recession, M&A activity increased briskly in all segments of the economy and all size categories. The announcement of a few large deals signaled to some observers a “paradigm shift”³ in M&A where old rules about strategy, size, and deal design were being replaced by new rules. Of general note was the significance of “strategic buyers” who sought to combine with targets who were related along business lines, and with whom synergy value might be created. The superior economics of strategic combinations dampened somewhat the influence of financial buyers (i.e., LBO specialists). Of special note was the high M&A activity in banking, health care, defense, and technology. This sector-focused activity was a response to overcapacity as the industry was deregulated (banking), as national defense spending declined, and as the payment patterns by insurers changed (health care). In technology, the high rate of activity was stimulated by rapid invention and technological change. Finally, the high rate of M&A activity coincided with historically low rates of interest, and rising stock prices. As Exhibits 4.1, 4.2, and 4.3 reveal, the M&A activity in the most recent wave far exceeded any levels seen previously, with transaction values rising to about 15 percent of the U.S. gross national product (GNP) in 1999. Following the bursting of the Internet bubble in March 2000, M&A activity declined sharply, in tandem with the stock market and the U.S. economy, and in conjunction with the rise of global economic and security concerns.

This review of the four waves reveals much more about their differences than similarities. What they seem to bear in common is low or falling interest rates, a rising stock market, and an expanding economy. But they differ sharply in industry focus (e.g., oil, banking, utilities, Internet, conglomerate, etc.), in type of transaction (e.g., horizontal, vertical, conglomerate, strategic, or financial), in the presence or absence of hostile bids, in industry breadth, in breadth of deal size, and in the role of large blockbuster deals. Merger activity appears to slow down when the cost of capital increases, as measured by real interest rates. Studies⁴ show that M&A activity is countercyclical to bond yields. More generally, merger activity increases with the level of overall economic activity, as measured by nominal GNP; see Golbe and White (1988).

On close examination, there appears to be an industry-based pattern to the waves of M&A activity. The Mergerstat database suggests that in 1998 and 1999 the most active 14 percent of industries accounted for 60 percent of all M&A deal value. In the period 1995 to 1998, financial services accounted for 22 percent of all M&A value. In 1981 to 1984, oil and gas accounted for 25 percent of all transaction value.