Recent Trends in M&A Activity - An Increasingly Hostile Environment

After a significant decline in hostile activity in 2000, attempted hostile acquisitions in 2001 increased 135% over 2000. While M&A activity dropped nearly 60% in 2001 from the previous year’s levels,¹ announced hostile acquisition activity increased from $39 billion² to over $94 billion during the same period.³ By comparison, in 1988, at the peak of corporate raider hostile acquisitions, $81 billion in hostile deals took place.⁴ Despite the sharp increase, the $94 billion in hostile acquisitions in 2001 may actually understate the increased use of the hostile takeover strategy. While significant hostile activity continued at a rapid pace through the third quarter of 2001, nearly all hostile activity promptly ceased after the events of September 11th. Takeover specialists believe that the cessation of unsolicited bids occurred because the public would perceive such hostile takeovers as taking advantage of a national tragedy and profiteering in a temporarily shocked marketplace.⁵ Remark