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The Fifth Edition was published by John Wiley & Sons, Inc. in 2011.
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Library of Congress Cataloging-in-Publication Data:
ISBN 978-1-118-99754-3 (Hardcover)
ISBN 978-1-119-06335-3 (ePDF)
ISBN 978-1-119-06336-0 (ePub)
THE FIELD OF MERGERS and acquisitions has undergone tumultuous changes over the past 20 years. The 1990s witnessed the fifth merger wave – a merger wave that was truly international in scope. After a brief recessionary lull, the merger frenzy began once again and global megamergers began to fill the corporate landscape. This was derailed by the subprime crisis and the Great Recession. When the economic recovery was slow, so too was the rebound in M&A activity. However, by 2013 and 2014 M&As began to rebound more strongly.
Over the past quarter of a century we have noticed that merger waves have become longer and more frequent. The time periods between waves also has shrunken. When these trends are combined with the fact that M&A has rapidly spread across the modern world, we see that the field is increasingly becoming an ever more important part of the worlds of corporate finance and corporate strategy.
As the M&A field has evolved we see that many of the methods that applied to deals of prior years are still relevant, but new rules are also in effect. These principles consider the mistakes of prior periods along with the current economic and financial conditions. It is hoped that these new rules will make the mergers of the future sounder and more profitable than those of prior periods. However, while dealmakers have asserted that they will pursue such goals, we would be remiss if we did not point out that when deal volume picked up dramatically such intentions seemed to fall by the wayside and M&A mistakes started to occur. In fact, as with many other areas of finance, learning from past mistakes proves challenging. Lessons that are learned tend to be short-lived. The failures of the fourth merger wave were so pronounced that corporate decision makers loudly proclaimed that they would never enter into such foolish transactions. However, there is nothing like a stock market boom to render past lessons difficult to recall while bathing in the euphoria of rising equity values.
