Mergers and Acquisitions in the European Union: Observations for Trade Union Organisations

Palmieri S.

Mergers and Acquisitions in the European Union: Observations for Trade Union Organisations

Paper prepared for the Parliamentary Group of the Party of European Socialist Seminar on Economic, Employment and Social implications of Restructurings.

Brussels, 14/15.10.02

The objective of this paper is to examine the factors that led to the growth of European and global merger and acquisition (M&A) activity over the past decade. As we will see in the first paragraph, there were 26,062 international M&A transactions during the first half of the 1990’s, rising to 50,787 transactions during the second half of the 1990’s. The value of international M&A transactions in the second half of the nineties has quintupled compared to the value during the period 1990-1995, i.e., $8,960 billion against $1,570 billion. The increase in M&A transactions has also been important on a European level during the same period. In fact, it has risen from 6,767 transactions, equal to a value of $256 billion for the period 1990-1995, to 9,696 transactions, equal to a value of $1,310 billion for the period 1996-2001. This phenomenon of a large increase in M&A activity on an International and European scale, in addition to producing purely economic effects, has also produced implications of a social nature due to the effects on employment from industrial restructuring. Precisely as a result of the importance assumed by these consequences, we consider it fundamental to proceed – as we did in paragraph 2 – with an examination of the fundamental factors linked to the development of the phenomenon of the increase in M&A transactions. Based on the existing debate, we have attempted to delineate- in paragraph 3 – a summary framework of the possible implementations, which may lead to the application of “social” rationalisation processes of M&A and the resultant restructuring activities. We conclude the present study with a reference to an element which is now receiving unanimous recognition as a factor able to permit facing the present economic and social changes without tensions and great efforts: training