The LBO: Stakes and Perspectives

After the 1980's, LBO projects have dramatically increased on the American and European markets. Despite the high level of debt, they provide significant gains and they improve the productivity of the acquired firms. First, we describe the evolution of this industry on these markets, we focus particularly on the french market. Then we present the factors that explain the LBO "wave". We find several factors such as financial globalization, lower interest rates, tax and managerial terms, legal mechanisms... Finally, we study the risks of LBO acquisition. We distinguish financial risks, social risks and tax and legal risks.