In the 1960s, a typical M&A deal was a friendly acquisition, usually paid for with stock of the acquiring company rather than cash. Such mergers were mostly carried out by a large corporation or a small public or private enterprise; and the target companies were outside the acquirer's core business. Such unrelated diversification was common among large companies. The essential characteristic of the buyouts of the 1960s was therefore independent diversification. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay However, by the 1980s, many of the megacorporations or conglomerates formed following the mergers and acquisitions wave of the 1960s were performing poorly. , particularly following the energy price shocks of 1974 and 1979. Repurchase activity began to accelerate in the early 1980s and boomed for much of the decade. Buyouts in the 1980s were characterized by massive recourse to debt. Companies have purchased other companies in leveraged buyouts by borrowing instead of issuing new shares or using only their cash on hand. Other companies have restructured, borrowing to buy back their own shares. Finally, some companies have been privatized through leveraged buyouts (LBOs). In an LBO, a group of investors, often combined with mandatory management, borrows money to buy back all of a company's public shares and takes the company private. The use of junk bonds increased significantly throughout the 1980s, along with leveraged buyouts. In the mid-to-late 1980s, more than 50% of junk bond issuances were tied to buyouts or mergers. During this period, isolated diversification was widespread among large companies. In addition, the proportion of conglomerates without a dominant company increased from 7.3% to 18.7%. There has also been a considerable movement towards diversification among companies which have retained their main activity. The driving force behind the 1960s wave was the high valuation of corporate stocks and strong corporate cash flows. However, the management was not willing to pay high cash flows in the form of dividends and, on the other hand, able to issue shares on attractive terms, so it turned to acquisitions. The average target size in the 1980s increased significantly from the modest level of the 1960s. By 1989, 28% of Fortune 500 companies had been acquired, and many deals, especially the largest, were hostile. Additionally, the medium of exchange in buybacks was cash rather than shares, they were characterized by extensive use of leverage. Companies were purchased by other companies through leveraged buyouts by borrowing rather than issuing new shares or using only available cash. Other companies have restructured, borrowing to buy back their own shares. The 1980s were also characterized by later forms of changes in control, which included "bankruptcy" buyouts. Bankruptcy buyouts involved the sale of a substantial fraction of the target's assets to other companies. Another form of merger appeared during this period: the hostile takeover. Hostile takeovers provoke strong reactions,.