Big Surf : A Complexity Theory Perspective of Merger and Acquisition Waves

Mergers and acquisitions (M&A) occur in brief bursts or ‘waves' of activity. These waves are known value-creation opportunities, but their occurrence is a mystery to scholars and managers alike. The existing literature on M&A waves is fragmented, incomplete, and lacking in an overarching theory. We explain their occurrence by applying a complexity theory perspective to M&A waves, which helps to integrate and subsume prior theories. The observation of a power law distribution for a sample of 44 aggregate U.S. M&A waves from 1895 to 2008 supports our interpretation