Book Review: Taxes and Mergers: A Survey

• DOI: 10.1177/0003603X8703200411
• Published date: 01 December 1987
• Date: 01 December 1987
• Author: Ralph L. Nelson
• Subject Matter: Book Review

The Antitrust Bulletin/Winter 1987

Taxes and Mergers: A Survey

1079

Michael Smirlock, Randolph Beatty, and Saman Majd

New York: Salomon Brothers Center for the Study

of

Financial

Institutions, New York University Graduate School

of

Business

Administration, Monograph Series in Finance and Economics 1985-3

(1986),

iii

+42 pp., $5.00.

Reviewed by Ralph

L.

Nelson, Professor

of

Economics, Queens

College, City University

of

New York

In 1986, according to the magazine Mergers and Acquisitions,

there were 4,024 firm disappearances by merger and acquisition

(see table 1). The price paid for the firms so acquired, covering all

sectors

of

the economy, was $190.5 billion. This high level

of

merger activity followed upon 12 years

of

almost uninterrupted

increase, the 4,024 disappearances

of

1986 amounting to more

than four times the 926 disappearances

of

1974. This latest surge

in merger activity, given the prominence

of

hostile takeovers and

taking place primarily in 1981-86, has come to be known as the

takeover wave

of

the 1980s.

The low year

of

1974 marked the end

of

the conglomerate

merger movement

of

the late 1960s, whose peak years were 1968

and 1969.

If

it turns out that the peak years

of

the present

movement are

1985

and 1986, then, for the first time in our

history, U.S. merger waves will have followed one another by less

than two decades (17 years). This fact gains significance when one

considers that the time lag between the merger wave at the

turn

of

the century and that

of

the late

1920s

was 28 years and the lag

between the merger wave

of

the late 1920s and the conglomerate

wave

of

the late 1960s was 40 years (see table 2).

© 1988 by Federal Legal Publications, Inc.