|Mergers and acquisitions, and leveraged buy outs of corporations in many industries, were conspicuous features of the U.S. economy during the 1980s, particularly the last years of the decade. Reports and rumors of buy outs played a major part in driving the Dow Jones Industrial Average to all-time highs in 1990 following the stock crash of October, 1987. But in 1990, the long expansion of the 1980s came to an end; by the end of the year even the Bush Administration was officially admitting that the U.S. economy was in recession. In the new economic climate, what level of activity in M&A (mergers and acquisitions) and LBOs (leveraged buy outs) can be anticipated for 1991? This is the core question addressed in the following pages.
To understand the prospects for mergers and acquisitions and leveraged buy outs in the coming year, we must first consider a)