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Mergers and Acquisitions

The Innovation Impact

Edited by Bruno Cassiman and Massimo G. Colombo

This book examines the issue of mergers and acquisitions (M & As) in the context of technological development, and in particular the impact of M & As on the innovation process. In so doing, the book integrates two bodies of literature, on M & As, and on innovation studies, a nexus which the editors contend represents an important step in the advancement of our understanding of both with clear implications for competitive advantage and growth of firms. Drawing on perspectives from both management and economics, the book offers a cohesive blend of theory, methodology, and a wealth of empirical material.
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Chapter 2: Trends in Mergers and Acquisitions

Leo Sleuwaegen and Giovanni Valentini


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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