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Consolidation and merger of corporations

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In this paper, we present a model of defensive mergers and merger waves. We argue that mergers and merger waves can occur when managers prefer that their firms remain independent rather than be acquired. We assume that managers can reduce their chance of being acquired by acquiring another firm and hence increasing the size of their own firm. We show that if managers value private benefits of control sufficiently, they may engage in unprofitable defensive acquisitions. A technological or regulatory change that makes acquisitions profitable in some future states of the world can induce a preemptive wave of unprofitable, defensive acquisitions. The timing of mergers, the identity of acquirers and targets, and the profitability of acquisitions depend on the size of the private benefits of control, managerial equity ownership, the likelihood of a regime shift that makes some mergers profitable, and the distribution of firm sizes within an industry.

Consolidation and merger of corporations --- Econometric models.

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Research suggests that an increasing number of people experience organisational changes such as mergers and acquisitions as highly emotional life events. Indeed, given that, as the authors prove, 70 per cent of all mergers and acquisitions fail to reach their initial goals largely because of neglected people issues, it is a must for every manager and M&A researcher to understand the emotional side of such change processes.

Consolidation and merger of corporations --- Psychological aspects.

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Antitrust law --- Consolidation and merger of corporations --- Restraint of trade

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Antitrust law --- Consolidation and merger of corporations --- Law and legislation