Why Do We Have This M & A Wave?

Abstract

Different people are wont to provide different answers to a perplexing issue: why has the ‘urge to merge’ affected industries worldwide all of a sudden with the amazing intensity we observe in virtually every industrialized country? Reasons obvious from the outset include:

• 1. Deregulation turned into a global movement due to the almost simultaneous ascendance to power of conservative parties in all major industrial nations.

• 2. Technology requires R&D investments that involve risks unmanageable for smaller units. If the torch is to be passed on, it has to be to someone able to shoulder the necessary investments.

• 3. Respect for bureaucracies has reached rock bottom. And there it will remain, for a while at least. Profit Centers and entrepreneurial ‘small is beautiful’ drives have cast doubt on the efficiency of large organizations. Virtually none of the stunning major market breakthroughs of the last two decades can be traced back to a bureaucratic corporate giant.