In 'Anglo-Saxon' economies with very active stock markets, company expenditure on acquisitions can reach half as much as spending on new fixed investment. Traditionally this massive expenditure has been justified by pointing to the potential gains from transferring control to more able managers or ones more committed to shareholders' interests; or to the gains from scale economies or increased market power. However, evidence of such gains has been questioned by contributors to the industrial organization, finance and management literatures, and new theories focusing on managerial objectives and principal- agent problems have emerged to help explain the disappointing performance of many acquisition programmes and the growing recourse to divestment.

At first sight, the potential gains to shareholders from turning around companies with flagging performance and for achieving scale economies or enhanced market power seem to justify the immense commitment of owners' funds and mangers' time to acquisition activity. In practice, however, the movements of accounting profits and acquirers' share prices and the large-scale divestment of recent acquisitions raise doubts about the benefits of takeovers. It has been suggested in some quarters that either the problems of assessing, integrating and monitoring acquisitions have been systematically underestimated, or that mangers interests have tended to prevail over those of shareholders.