Chapter 7: Mergers: An Overview
Stephen Martin I am the very model of a modern merger-wavicle, I have dimensions horizontal, vertical, and conglomerical, I know the kings of industry, and I quote the ﬁghts historical From U.S. Steel to DaimlerChrysler, in order divestiturical; I’m very well acquainted, too, with matters mathematical, I understand equations, both the simple and quadratical, About the CAP-M I’m teeming with a lot o’ news, With many cheerful facts about random walks on the loose. (With apologies to Gilbert and Sullivan) 1 INTRODUCTION The singular of data, Stigler among others is supposed to have said, is anecdote. By the same token, the plural of anecdote is data. At this writing, business history has been good enough to furnish us with ﬁve anecdotes about mergers in developed economies, in the form of the ﬁve merger waves recorded between the turn of the nineteenth century and the turn of the twentieth century. It is possible to take the view that each merger wave is suﬃciently diﬀerent from the others to require individual study (Markham, 1955, p. 154). Yet one may hope that (like waves in the ocean) although each merger wave is in some aspects unique, merger waves as a class have enough elements in common to permit generalization about mergers as a phenomenon. That is the approach taken here. In section 2, I review each of the ﬁve merger waves of the last hundred-plus years. In sections 3 and 4 I distill the things economists have had to say about...
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