Capital Ideas is now Chicago Booth Review but unfortunately original articles are no longer available. If you click through you will be taken to the Internet Archive site to find an archived copy.
The 1980s brought a phenomenal dollar volume of corporate takeovers and restructuring activity — activity distinguished by an unprecedented level of leveraged buyouts (LBOs) and hostile takeovers led by raiders such as Henry Kravis of Kohlberg Kravis & Roberts (KKR) fame. Despite the resurgence of takeovers in the 1990s, LBOs and raiders have not reappeared. Their legacy, however, remains. As finance professor Steven Kaplan of the University of Chicago Graduate School of Business explains, today’s shareholders, boards of directors and managers have applied the insights and strengths of the 1980s LBOs to today’s corporate governance. “In that sense,” says Kaplan, “we are all Henry Kravis now.”
Editor’s Note: considering this article was written in 1998 it is interesting to read today knowing what has transpired in the past several years on the corporate governance front.
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