Get Merger Waves

In support of the industry shock theory, Kleinert and Klodt (2002) examine the causes of the five original merger waves in the 20th century. The first merger wave, which occurred from 1897 to 1904, was caused by the industrial revolution and then ended with the enforcement of the Sherman Act and Clayton Act.

The first four waves occurred between 1897 and 1904, 1916 and 1929, 1965 and 1969, and 1984 and 1989. The first merger wave occurred after the depression of 1883, peaked between 1898 and 1902, and ended in 1904. During the second merger wave, several industries were consolidated.

The first four waves occurred between 1897 and 1904, 1916 and 1929, 1965 and 1969, and 1984 and 1989. The first merger wave occurred after the depression of 1883, peaked between 1898 and 1902, and ended in 1904. During the second merger wave, several industries were consolidated.

The Fifth Merger Wave lasted from 1993 to 2000, a period after the economic slump of 1990 to 1991. The rate at which large mergers were formed was about the same level as that of the Fourth Merger Wave. However, there was a major decline in the rate of hostile takeovers.

A merger wave can be defined as a period of time in which more merger bids materialise than usual. As can be seen in the visual below, there have been six of these waves since 1895.

A quick history recap for you: the first four waves of mergers occurred between the years 1897 and 1904, the next wave happened in 1916 and 1929, followed by the merger deals in 1965 and 1969, then again in 1984 and 1989.

merger waves occur in response to specific industry shocks that require large scale reallocation of assets. However, these shocks are not enough. There must be sufficient capital liquidity to accommodate the asset reallocation.

Fourth Wave: Hostile Takeovers and Corporate Raiding. The fourth merger wave, which occurred from 1984 to 1989, was qualitatively different from the previous waves.