Leo Sleuwaegen and Giovanni Valentini INTRODUCTION In this chapter we ﬁrst provide a general description of the ﬁve merger waves as well as the trends in world wide Mergers and acquisitions (M&A) since 1985. Subsequently, we focus on the factors driving the ﬁfth M&A wave and recent trends in M&A in the European Union (EU). In this last section, special attention is given to the relationship between technological change and M&A. 2.2 MERGER WAVES It has become common to distinguish ﬁve merger waves in economic history. The waves have been clearly identiﬁed in the USA. In Europe, the evidence on the ﬁrst three waves is less systematic and covers mainly the UK and Germany. Using approximate dates, the waves correspond to the following time periods (see also Figure 2.1): – 1887–1906 Helped by the economic recovery and development of ﬁnancial markets during this period, several great oil, steel, and other trusts were created. The horizontal integration of many smaller ﬁrms into larger groups threatened to monopolize some of these economic sectors. 1918–29 A further consolidation within industries took place during this period. The oligopolies that emerged created concern and gave rise to the design and implementation of an eﬀective anti-trust legislation in the USA. At the same time, a signiﬁcant number of vertical mergers in resource intensive sectors took place, putting the complete production and distribution chain under the control of a single ﬁrm. – 11 12 1800 1600 1400 1200 1000 800...
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