Ended on black thursday in 1929 wall street crash

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Ended on “Black Thursday” in 1929 Wall Street Crash Third Wave: 1965 – 1969 - Rapid growth in USA – significant number of business combinations - Strict anti-competitive/anti-trust legislation in place therefore primarily conglomerate mergers 4 | P a g e
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- There wasn’t any significant change in the competitive structure - Role of investment bankers changed previously exercise considerable influence due to the fact that they financed the deals, simply withheld the finances now no longer financed all the deals, lost the control - Bull market – spread optimism and unrealistic valuations of companies - Many conglomerates that were formed during this period lost value after 1969 1974 – First HOSTILE takeover in history - Unfriendly takeover of Electric Storage Battery Company by the International Nickle Company Fourth Wave: 1984 - 1989 - Competition between investment bankers grew and so started to finance hostile takeovers - Several hostile takeovers were initiated by corporate raiders - Corporate Raiders – buy large number of company’s shares that are undervalued to gain substantial voting rights, make significant changes to the company to increase market value and so increase return. - Emergence of leveraged buyouts (LBOs) and management buyouts (MBOs) - leveraged buyouts (LBOs) – purchase of a company by a small group of investors, financed largely with debt - management buyouts (MBOs) – when management buys the company using debt. - LBO’s were facilitated by the development of the junk bond market. - Risk arbitrageurs played a big role in the takeover process in this wave. - Much larger M&A transactions, reversal of conglomerates from the previous wave. - Ended with the market crash in October 1989 Fifth Wave: 1992 – 2000 - 1992 – number of M&A transactions began to increase again - Continued de-conglomerating to focus on core competencies - Record high stock prices characterized global financial market - M&A activity is driven by increased globalization, deregulation and the convergence of ICT - Many industry roll-ups took place – big companies take over smaller ones to eliminate competition - M&As going global – structural changes in other countries allowed for M&A transactions to begin - Ended with IT-bubble bursting in 2000 Sixth Wave: 2003 – 2008 - Improved economic conditions around the world – increase in M&A transactions - Focus on M&As to undertake intangible assets - Financial performance of M&As was terrible – managers poor behaviour - Stage of “building empires” due to hubris executives – leading to poor decisions and management - Ended as a result of the global financial crisis in August 2008 5 | P a g e
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Recent M&A Activity - High M&A activity in the global arena and emerging markets M&A Activity in Africa - Impact of the financial crisis? much less affected than the rest of the globe - Selected industries have been targeted by foreigners (mainly Asians) - Most M&As occurred in telecommunications, financial services and basic materials - “Arab Spring” – major political upheaval in North Africa and Middle East
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