BRUCE WASSERSTEIN was probably the most famous mergers and acquisitions (M&A) banker on Wall Street in the 1980s and 1990s. Yet “Bid ‘em up Bruce”, who died in 2009, was ambivalent about his trade. The best rainmakers were capable men, he once wrote, but dealmaking also attracted “hustlers and swaggering mediocrities”. And whereas takeovers made the business world more dynamic, they also led to “pain, dislocations and blunders”.
Whether dealmaking is sensible is once more an important question, because M&A are back with a vengeance, after a lull following the financial crisis. Worldwide, $3.6 trillion of deals have been announced this year, reckons Bloomberg, an information provider, approaching the peak reached in 2007. In pharmaceuticals (see article) and among media firms the activity is frantic. Deals worth more than $10 billion are again common. America and Britain, with their open markets for corporate control, account for a disproportionate share of the action. So do cross-border deals, which have risen from a sixth of activity in the mid-1990s to 43% today.