Aquisitions and Takeovers

Firms are acquired for a number of reasons. In the 1960s and 1970s, firms such as Gulf & Western and ITT built themselves into conglomerates by acquiring firms in other lines of business. In the 1980s, corporate giants like Time Inc., Beatrice Foods, and RJR Nabisco were acquired by other firms, their own management, or wealthy raiders, who saw potential value in restructuring or breaking up these firms. The 1990s saw a wave of consolidation in the media business as telecommunications firms acquired entertainment firms, and entertainment firms acquired cable businesses. Through time, firms have also acquired or merged with other firms to gain the benefits of synergy, in the form of either higher growth or lower costs.