In the context of finance, there is little interest in the history of M&A, and it is likely that many errors that occurred in earlier periods will reoccur.
Understanding history can help us identify the proximity to a new wave of M&A.
In 2014, optimism seems to be returning to the market, and the value of mergers and acquisitions globally reached 1.75 trillion U.S. dollars in the first six months of the year, an increase of 75% over the same period last year and the largest volume of transactions since 2007. What is observed is that the business environment after the 2008 crisis, characterized by risk aversion and a focus on organic growth by firms, is dissipating.
It is true that we are living in a more volatile era in terms of market growth, but companies are beginning to understand that this volatile world is the new standard, after all, there will always be wars and countries with difficulty to honor their sovereign debt payments. In such an environment, it may not be possible to rely only on organic growth and cost cutting to deliver consistent financial results. Managers seem to once again be believing that it is easier to buy growth than build it.