Retirement Security: Trends in Corporate Restructurings and Implications for Employee Pensions
By Charles A. Jeszeck, David Lehrer, Charles J Ford, Jessica Moscovitch, James Bennett, Lilia Chaidez, Michelle Munn, Jessica Orr, Cady Panetta, Rhiannon Patterson, Rachel Stoiko, Frank Todisco, Weigle Hannah, Adam Wendel
Over the past 20 years, corporate restructurings, particularly mergers and acquisitions (M&A) tended to happen more frequently during periods of economic expansion. GAO’s analysis found that from 1999 through 2018, M&A activity comprised the largest share of corporate restructurings. In terms of dollar value of completed deals, M&A activity experienced relative peaks in 2000, 2007, 2015-2016, and 2018.
The number of M&A deals followed a similar trend. Further, GAO found that company takeovers comprised the largest share of completed M&A activity during the time period, and many completed deals included private equity involvement, that is generally a transaction involving equity capital not quoted on a public exchange. Since 2009, M&A deals, on average, have tended to be completed in shorter time frames. In contrast, large bankruptcies — those $305 million or more in 2018 dollars — occurred during periods of economic distress and peaked during the two most recent recessions.
Source: SSRN
