2006 set a record for mergers and acquisitions worldwide. Deals totaled $3.79 trillion, 38% higher than in 2005, and 55 of the transactions were valued at more than $10 billion each, according to data from Thomson Financial. Europe was one of the big players, registering 39% more deals than in 2005 for a total of $1.43 trillion. The U.S. came in at $1.56 trillion, 36% higher than the year before. Private equity firms were major movers in this trend, responsible for 20% of global M&A activity and 27% of activity in the U.S., according to Thomson. How long will this M&A binge continue, and when it does come to an end, what will be the factors behind the retreat? Knowledge@Wharton asked management professor Harbir Singh, an expert on corporate acquisitions and restructuring, to offer his views on the M&A landscape.
Knowledge@Wharton: A recent report in The New York Times said that of 790 deals in the U.S. greater than $250 million between 1995 and 2001, only 3 in 10 have created meaningful value for shareholders. Why is this? Do mergers, in fact, do more harm than good?
See full Article.
Posts
