Literature Review

Abstract

The emergence of the LBO phenomenon during the takeover boom of the 1980s has stimulated a broad stream of academic research that analyses the effects of LBO transactions. This research in the areas of both corporate finance and strategic management can be categorized according to the focal impact of the LBO transaction into studies primarily concerned with the effect on target valuation, operational changes, impact on corporate governance and strategy, changes in the resource and capability base and profitability. The following sections are intended to give an overview of the relevant LBO literature, with special attention to value creation drivers in buyout transactions.