πŸ“… 00/00/0000 ⏰ 00:00:00

There are both common and variable patterns of takeover activity and profitability across M&A waves.

Waves in mergers and acquisitions between 1997-2007

The Age of the Strategic Mega-Merger: 1992–2000

Many believed that the M&As during the 1980s were largely overpriced and overleveraged and junk bond or high-yield financing was considered unlikely to recover from the pummeling it had taken at the end of the decade. Consequently, many assumed that takeovers would not return to their levels of the late 1980s.

Although M&A activity did diminish during the 1990 recession, the number of transactions and the dollar volume rebounded sharply beginning in 1992. The longest economic expansion and stock market boom in U.S. history, uninterrupted by recession, was powered by a combination of the information technology revolution, continued deregulation, reductions in trade barriers and the global trend toward privatization. Both the dollar volume and number of transactions continued to set records through the end of the 1990s before contracting sharply when the Internet bubble burst, a recession hit the United States in 2001 and global growth weakened.

The Rebirth of Leverage: 2003–2007

U.S. financial markets during this sixth wave, especially from 2005 through 2007, were characterized by an explosion of highly leveraged buyouts and private equity investments (i.e., takeovers financed by limited partnerships) and the proliferation of complex securities collateralized by pools of debt and loan obligations of varying levels of risk.

Much of the financing of these transactions, as well as mortgage-backed security issues, took the form of syndicated debt (i.e., debt purchased by underwriters for resale to the investing public). The syndication process disperses such debt among many different investors.

The issuers of the debt discharge much of the responsibility for the loans to others (except where investors have recourse to the originators if default occurs with in a stipulated time). Under such circumstances, lenders have an incentive to increase the volume of lending to generate fee income by reducing their underwriting standards to accept riskier loans. After such loans are sold to others, loan originators are likely to reduce their monitoring of them. These practices, coupled with exceedingly low interest rates made possible by a world awash in liquidity, contributed to excessive lending and encouraged acquirers to overpay significantly for target firms.

Because it is difficult to determine the ultimate holders of the debt after it is sold, declining home prices and a relatively few highly publicized defaults in 2007 triggered concerns among lenders that the market value of their assets was actually well below the value listed on their balance sheets. Subsequent write d owns in the value of these assets reduced bank capital. Regulators require banks to maintain certain capital-to-asset ratios.

To restore these ratios to a level comfortably above regulatory requirements, lenders restricted new lending. Bank lending continued to lag, despite efforts by the Federal Reserve to increase sharply the amount of liquidity in the banking system by directly acquiring bank assets and expanding the types of financial services firms that could borrow from the central bank, or by the U.S. Treasury’s direct investment in selected commercial banks and other financial institutions. Thus, the repackaging and sale of debt in many different forms contributed to instability in the financial markets in 2008. The limitations of credit availability affected not only the ability of private equity and hedge funds to finance new or refinance existing transactions, but also limited the ability of other businesses to fund their normal operations. Compounded by rapidly escalating oil prices in 2007 and the first half of 2008, these conditions contributed to the global economic slowdown in 2008 and 2009 and the concomitant slump in M&A transactions, particularly those that were highly leveraged.

Above picture provides the historical data underlying the trends in both global and U.S. merger and acquisition activity in recent years.

πŸ“… LAST UPDATED: 01/01/19 11:43:25 mega-merger mortgage-backed security securities lenders investing acquirers
GENERAL WARNINGS
βš– Notwithstanding that, pursuant to SEC Β§ 15(d)(1), our securities analysts are independent and qualified, and pursuant to SEC Β§ 15(d)(2), our research reports are in compliance with all applicable laws, we neither endorse our reports, nor do we recommend any decision or action made upon any and all information therein, because said information may be biased, extractive, inadvertently false or inaccurate, among many other existing flaws and risks, and our Entity does not provide any liability to any person or entity under no circumstances.
βš– Notwithstanding that our equity securities gradings are in accordance with securities standards and we are authorized and qualified to grade equities and derivatives thereof and provide opinions and recommendations thereto, any and all aforesaid information are solely informational, non-advisory and non-recommendatory at all places and times, even if inadvertently, explicitly or exactly mentioned, construed or written otherwise in any other time, place or document, whether directly or indirectly pertained to our Entity or our Services.
βš– Notwithstanding that we regularly act to accurate and optimize all our near-real-time ("real-time") speculations, values, estimations and forecasts, at the present time, all our estimations and approximations are inaccurate, based upon limited and delayed 60-second or longer data from external sources, without any insurance or certification. All per second estimations are based on assumptive semi-stochastic calculations, which means that aforesaid near-real-time values are computed using random data in part and mathematical derivatives of untimely or timely financial and economic data in part, thereby and therefore unreliabilities and uncertainties therein are unlimited and may be unknown, making any and all information herein, hereof, hereto or herewith, substantially speculative, thereby an extreme risk of involuntarily deprival and dispossession of any materialistic or non-materialistic things, that a person or entity may possibly hold, exist in any and all actions pertained to said information.
βš– This application prototype is in alpha development stage, and carries inconstancies and inaccuracies, among other flaws, which we very much appreciate it if you may provide views or feedbacks via emails, text/voice messages or mails, and our contact information is copied in the footer of this page.

βš– DISCLAIMER

EVEN IF, IN OTHER TRANSACTIONS, TIMES AND PLACES, ANY OF THE FOLLOWINGS IS OR MAY BE OTHERWISE WRITTEN, SAID, PRESENTED, PERCEIVED, DEPICTED OR CONSTRUED, IT IS IMPORTANT TO PRIORLY NOTE TO THIS DISCLAIMER AT ANY AND ALL TIMES AND PLACES AND TRANSACTIONS AS THE PRIORITY REFERENCE AND THAT: (A) DEFINITIONS IN OUR BY-LAW APPLIES TO THIS ENTIRE DISCLAIMER; AND (B) ANY AND ALL INFORMATION, OBJECTS, AGREEMENTS OR SERVICES HEREOF, HEREIN, HERETO OR HEREWITH ARE NOT ENDORSED FOR ANY PERSON OR COMPANY, ARE OR MAY BE INADVERTENTLY FALSE, INFORMAL, INACCURATE, IMPRECISE, UNQUALIFIED, UNACCREDITED, UNCERTIFIED, UNRELIABLE, UNVERIFIED, UNINSURED AND BIASED, AMONG MANY OTHER FLAWS AND RISKS, AND ARE SOLELY FOR NON-RECOMMENDATORY, NON-ADVISORY INFORMATIONAL PURPOSES IN ANY AND ALL ASPECTS, AND NONE CONSTITUTES ANY ADVICE, BASELINE, COUNSELING, DIRECTION, GUIDANCE, GUIDELINE, RECOMMENDATION OR SUGGESTION, WHATSOEVER, AND NONE IS PROVIDED AS TO WHETHER ANY AND ALL INFORMATION, OBJECTS, AGREEMENTS OR INSTRUMENTS IS APPROPRIATE FOR ANY PERSON OR COMPANY; AND (C) BONDS, COMMODITIES, CONTRACTS, DEBENTURES, EQUITIES, EXCHANGES, FINANCING, FOREX, FUTURES, INSTRUMENTS, INVESTMENTS, LOANS, OPTIONS, STOCKS, SWAPS, TRADES OR ANY TRANSACTION CORRESPONDINGLY THEREOF CAN CARRY UNBEARABLE, HIGHLY SUBSTANTIAL AND EXTREMELY SPECULATIVE RISKS, AND MAY DIRECTLY OR INDIRECTLY CAUSE PERMANENT FAMILY, HEALTH, PERSONAL, PROFESSIONAL, KNOWN OR UNKNOWN LOSSES AND DAMAGES, AMONG MANY OTHER HAZARDS; AND (D) UNDER NO CIRCUMSTANCES, AICODY, ITS PAST, PRESENT OR POTENTIAL SUBSIDIARIES, PARENTS, CONTRACTORS, SUBCONTRACTORS, ADVERTISERS, AFFILIATES OR ANY PERTINENT PARTIES CORRESPONDINGLY THERETO ARE LIABLE FOR ANY AND ALL DIRECT OR INDIRECT COSTS, DAMAGES, EXPENSES, FEES, LOSSES, RISKS, OR ANY COMBINATION THEREOF OR CORRESPONDINGLY THERETO THAT MAY DIRECTLY OR INDIRECTLY ARISE FROM OR ASSOCIATE TO ANY AND ALL INFORMATION, OBJECTS, AGREEMENTS OR SERVICES HEREOF, HEREIN, HERETO OR HEREWITH; (E) BY CONTINUATION OF EACH AND EVERY VISIT, YOU ASSERT, ATTEST AND TESTIFY THAT YOU AGREE WITH OUR DAILY AMENDED AND UPDATED BY-LAW, TERMS AND CONDITIONS, PRIVACY POLICY, COPYRIGHT POLICY, COOKIES POLICY, CYBER SECURITY, LAW ENFORCEMENT, AND RISK WARNINGS, WHICH ALTOGETHER CONSTITUTES A DAILY, PRELIMINARY AND TEMPORARY AGREEMENT ("PTA") BETWEEN YOU AND ENTITY; AND (F) WE USE COOKIES AND CORRESPONDINGLY SIMILAR TECHNOLOGIES TO UNDERSTAND HOW OUR SERVICES ARE BEING USED OR UTILIZED, AND TO PROVIDE THE BEST ONLINE PRACTICES PRACTICABLE TO OUR CLIENTS VIA TAILORING CONTENTS AND ADVERTISING, DETAILS OF WHICH ARE AVAILABLE AT COOKIES POLICY.

© 2019 AICODY LC βš– ALL RIGHTS RESERVED

πŸ‡ΊπŸ‡Έ RISK WARNINGS βš– SAFETY πŸ“ SERVICES

× Aicody
πŸ“š Basic Articles
πŸ’Ή Stock Analytics
πŸ“Š Comparison Charts