Читать книгу Applied Mergers and Acquisitions - Robert F. Bruner - Страница 84

Interpreting M&A activity and anticipating and structuring deals depends on noticing the presence of the drivers of economic turbulence in a business setting. A consolidated list of such drivers (that expands on those identified by Schumpeter, Lamoreaux, Jensen, and Wasserstein) would include:

 Deregulation. The loosening of regulatory requirements in industries such as banking, airlines, trucking, and telecommunications has unleashed a wave of consolidation and rationalization of firms.

 Trade liberalization. The lifting of barriers to foreign trade has motivated inefficient protected firms to consolidate with more efficient domestic or foreign firms. The creation of the North American Free Trade Agreement (NAFTA) and the European Union are associated with M&A activity in trade-sensitive industries, such as textiles and agribusiness.

 Geopolitical change. The fall of the Iron Curtain triggered a wave of transactions in Central Europe as Western firms sought toehold acquisitions in that new market.

 Demographic change. Changes in the makeup of the population can affect competitive strategy and industry structure. Such changes include waves of immigration (in the United States, consumer products firms now compete explicitly for a share of the Hispanic-American market) and aging—for instance, the graying of the population in Japan affects the ability of firms to retain know-how.

 Technological change. Advances in all technology-linked industries have prompted firms to seek alliances, joint ventures, and acquisitions in order to stay abreast of change. Cisco Systems acquired 80 firms from 1994 to 2003 in its pursuit of technological leadership in the network systems industry. Generally, advances in information technology spur changes in the way firms compete.

 Innovation in financial markets. Since the early 1970s, capital markets have grown in sophistication and efficiency. The design of new financial instruments has permitted even small and privately held firms to access the capital they need to transform themselves. Jensen and Wasserstein mentioned the rise of the high-yield debt market as an example—this new instrument was highly influential in the rise of leveraged buyouts, and both private equity and debt financing.

 Globalization. As product and capital markets become more integrated across borders (thanks in large part to other contributing drivers mentioned here) the competitive arena for any one firm will expand, with new adversaries, suppliers, and customers. Because of this linkage, turbulence abroad can resonate at home.

 Organizational invention. Each wave of M&A activity was accompanied by experimentation with a new form of enterprise structure: the horizontal trust, the vertically integrated firm, the conglomerate, the LBO specialist, and the venture capital portfolio.

 Changes in consumer demand and supply in product markets. In the past 20 years, industries as varied as toys, media and entertainment, bicycles, and automobiles encountered customers who demanded (and were given) products that were more tailored, more fadlike, more rapidly delivered (i.e., with shorter design and manufacturing cycles), and of higher quality. These requirements imposed on a number of marginal players the choice either to merge or to exit from the industry.

 Changes in capital market conditions. The cost of money must remain on any list of drivers of turbulence. Though this would seem to be a macroeconomic driver (and therefore a factor Schumpeter might have warned against) the reality is that capital markets distinguish carefully among industries and firms within industries, as any inter- and intra-industry comparison of valuation multiples will show.