21: Mergers, Acquisitions and Corporate Control
merger of Continental and United Airlines. Finally, a conglomerate merger joins two companies in different
lines of business. General Electric was formed by mergers that took place over decades, with the resulting
conglomerate company producing everything from washing machines to jet engines to nuclear turbines.
21-1 MERGER WAVES AND INTERNATIONAL
ACQUISITION ACTIVITY
In some years, merger activity reaches such a frenzy that there seems to be daily news of yet another
dramatic offer from one company to buy another. In other years, activity slows down, often in response
to a weak economy. These ebbs and flows in acquisition activity are known as merger waves. As one of
the largest M&A markets, the United States provides useful historical data with which to analyse these
trends. For example, we see in Figure 21.1 that US M&A activity increased dramatically throughout
the 1990s, reaching a new high in 2000, near the peak of the internet/technology bubble. Acquisitions
then decreased (in both value and number) during the recession of the early 2000s, only to pick up again
in the mid 2000s and then drop once more during the 2008–09 recession. Activity then began to pick
up gradually, from early 2010. However, although the 2015 data is incomplete (the data was collected in
conglomerate merger
Unrelated diversification
mergers that occur between
companies in completely
different lines of business
FIGURE 21.1 REGIONAL TRENDS IN M&A ACTIVITY: BY TOTAL VALUE OF M&A TRANSACTIONS AND BY TOTAL NUMBER OF TRANSACTIONS
0
5000
10, 000
15, 000
20, 000
25, 000
30, 000
35, 000
40, 000
45, 000
0
500, 000
1, 000, 000
1, 500, 000
2, 000, 000
2, 500, 000
3, 000, 000
3, 500, 000
4, 000, 000
4, 500, 000
19841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012201320142015
Numb
er of D eal s
Deal Val ue (US
D millio
ns)
Completed Global M&A Deals
(by Year of Announcement)
Deal Value Number of Deals
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10, 000
0
100, 000
200, 000
300, 000
400, 000
500, 000
600, 000
700, 000
19841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012201320142015
Numb
er of D eal s
Deal Val ue (US
D millio
ns)
Completed M&A Deals involving A sia Pacific Companies
(by Year of Announcement)
Deal Value Number of Deals
0
2000
4000
6000
8000
10, 000
12, 000
14, 000
16, 000
18, 000
0
500, 000
1, 000, 000
1, 500, 000
2, 000, 000
2, 500, 000
19841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012201320142015
Numb
er of D eal s
Deal Val ue (US
D millio
ns)
Completed M&A Deals involving North American Companies
(by Year of Announcement)
Deal Value Number of Deals
0
2000
4000
6000
8000
10, 000
12, 000
14, 000
16, 000
18, 000
20, 000
0
500, 000
1, 000, 000
1, 500, 000
2, 000, 000
2, 500, 000
19841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012201320142015
Numb
er of D eal s
Deal Val ue (US
D millio
ns)
Completed M&A Deals involving European Companies
(by Year of Announcement)
Deal Value Number of Deals
Notes: 1 Data for 2015 is incomplete (figures provided are up to 7th December 2015).
2 Data provided for each region includes deals with any connection to the region. Thus cross-border transactions will be included as separate deals under all regions involved, and the
regional data sets are not mutually exclusive
Source: Data to create figure sourced from SDC Platinum, Thomson Reuters, 7 December 2015.