ADMN 3400H Lecture Notes - Lecture 9: Dot-Com Bubble, Takeover, Executive Compensation
30 Mar 2020
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Merger (or merger of equals ): two firms agree to integrate their operations on a relatively co-equal basis and create one new firm. Acquisition: one firm buys a controlling interest in another firm with the intent of making the acquired firm a subsidiary business within its own portfolio. Takeover ( or hostile takeover ): a special type of acquisition wherein the target firm did not solicit the acquiring firm"s bid (and may not approve of it) Spike 80s, junk debt to finance corporate acquisitions. 2010s increase in numbers of deals and dollar values. In 1990s prior to the dotcom bubble bursting. In 2017, companies announced over 50"600 transactions with a total value of more than 3. 5 trillion. Usd (2. 9 trillion eur/ 2. 5 trillion gbp): compared to 2016, the numbers of deals grew only marginally by 2. 9% while the value declined by. Is competition reduced significantly: government intervention may take place.
