Sammendrag
2021 saw a remarkable surge in the global market for corporate control, with a record number of 65,000 mergers and acquisitions (M&A). Among other factors, tax rules play an important role in shaping the probability and structure of M&A transactions. In 2008, the temporary suspension of limitations on tax loss transfers led to a substantial increase in bids for the struggling US bank Wachovia. It was speculated that the several billion in loss-carryforwards Wachovia had sitting on its books might have played a role in the sudden surge in buyers’ willingness to pay. This emphasizes the value of tax shields in M&A decisions.
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