Читать книгу Applied Mergers and Acquisitions - Robert F. Bruner - Страница 79

The long literature in Industrial Organization within economics studies the relation between returns on one hand, and firm size or market power on the other. Chapter 6 summarizes some of these relations and the uses of M&A to enhance the position and market power of the firm. The literature suggests that the creation of monopolies and collusive oligopolies permits producers to extract excessive returns from consumers—this is the so-called “rent-seeking” behavior condemned by public policy analysts. Active antitrust enforcement by governments is a brake on the creation of monopolies through M&A. The M&A waves of the 1890s and 1960s were seriously curtailed by antitrust enforcement action. Chapter 28 surveys the antitrust laws in the United States and their implications for deal development. Still, within the confines of antitrust law, firms have some latitude to exploit product market inefficiencies. A stream of literature, stimulated by Michael Porter (1980) sketches techniques by which firms may enhance their competitive position—this is surveyed in Chapter 6.

A contributor to the appearance of waves of M&A activity may be a kind of multiplier effect induced by the breaking up or rationalization of acquired firms. For instance, a buyer may want only the target’s domestic operations, not foreign; or only certain product lines; or only specific assets. Thus, one acquisition triggers a cascade of other deals. Porter (1987) finds that 53 percent of acquisitions are sold within five years, evidence consistent with a process of asset rationalization.

The incentive to seek economic “rents” is always present. Theories of monopoly and competitive positioning have little to say about waves of M&A activity over time. But the theories help to rationalize tendencies toward industry consolidation. Exactly what triggers these consolidations is unclear in the theory. Still, the theory suggests two diagnostic questions useful to practitioners:

1 Does the structure of my industry provide opportunities for consolidation through M&A? Industries consisting of many small competitors may be ripe for consolidating mergers. Highly concentrated industries may pose barriers to entry through M&A.

2 What is the current antitrust policy in this country and toward this industry? Government policy changes with changes in administration and may be associated with different moods of constraint or buoyancy in M&A activity.