The last three years have witnessed a surge of takeover activity in the United Kingdom which has been unprecedented in its duration, in the volumes of expenditure involved and in the size of some of the transactions. Moreover, many companies have undertaken cross-border acquisitions, particularly in the United States. Associated with these developments have been substantial changes in many companies' organisational and financial structure.
This article describes takeover activity by UK companies in recent years, placing the developments in their historical, international and regulatory context. Some possible explanations for the boom are considered, and the importance of financial factors-such as companies' liquidity and the willingness of the equity market to absorb new issues of ordinary shares-is underlined.
Takeover activity in the 1980s