The 1980s was a “decade of greed” as takeovers and wealth destruction
attained an abnormal level. Even policymakers had to formulate regulations
that would control the takeovers. Apart from the huge wealth gains and losses,
the decade had mergers worth $20 billion and professional fees amounting
to $100 million (Oesterle, 1997). The number, sizes, and frequency of
mergers have been on the rise since then. In 1996, for instance, the United
States attained a new high in the size of mergers and acquisitions. The gradual
formation of the trend started slowly in 1993, gained momentum in 1994-1995, and
reached its peak in 1996. In the year, the United States had 9 great deals;
seven exceeded $10 billion, while the rest were more
than $20 billion. This means that the record set by the 1980’s mergers and
acquisitions was already broken in 1996.
Although it is true that “mergers were a fad in 1980,” the claim that “they are now on a decline” is not true. Reporting for Statista, Ruden (2020) indicated that there were 14,247 mergers and acquisitions in 2019 and 12,123 in 2020. Although there was a decline, the numbers are by far higher than 9 mergers reported in 1996. Besides, the 2020 mergers amounted to about $170 billion. The amount itself is about $150 billion higher than that of the '80s. As Oesterle (1997) argued, the difference between the mergers of the '80s and that of the ‘90s is that the latter did not send shock waves on individuals and are, thus, less panicked. Moreover, mergers after the 1980’s have resulted in significant reorganization, proper assets distribution, and efficiency of firms. Therefore, it can be concluded that the 1980’s mergers laid the foundation for the most required policy transformations. This is also the reason why the sizes and popularity of mergers continue to increase from one decade to the next.
