Porsche and VW in 2008 if memory serves well. Almost ruined Porsche. Or Schaeffler and Conti, which almost ruined Schaeffler, a private company at the time.

It's almost like these things happen pretty regularly, so it's easy to find examples that correlate...

There is a documented negative effect on returns with private equity deal size. Record-setting leverage really only happens after prolonged low volatility twinned to easy money.

I like to post that picture of a python that tried to eat an alligator when Schaeffler's ill-timed purchase of Conti comes up. Always good for a laugh.

Schaeffler survived, but barely, and had Kurzarbeit not been a thing, it probably would have been a lot uglier. Kurzarbeit is a lot of why Germany came out of 2008/2009 in reasonably good shape. Better for pretty much everyone in an industry to be working 80% of the time in their current positions and getting 90% of their pay than for 20% of them to be out of work and struggling to make ends meet on unemployment - better for the workers, and better for their employers, who can turn around much more quickly when things get better.

The Porsche/VW thing was complicated by a short squeeze, not the financial crisis.

The short squeeze was an effect of two things (too lazy to look up the details now): Porsche having funding issues and tye complicated share structure of VW, the short squeeze affected the class B(?, those with limited voting power) of VW. Without the financial crisis, Porsche could have easily financed the take over.

It was incredibly risky so. And the attemot was partially driven by a feud between the Porsche and Piech branches of the Porsche family tree, with the latter "represebting" VW. All that does is show us that high stakes decisions should never be taken based on "personal" issues.

This seems like a great example of selection bias if there are blockbuster acquisitions every year.

I don't think there was any implication that the big buyouts before a crash are unusual - calling them "a feature of modern finance" seemed to be implying that they're inevitable.

Acquisitions become crazier and crazier as the market gets hotter and hotter, with ever increasing purchase prices - someone inevitably gets left holding the bag when the market comes crashing back down to earth, and it's often the greedier players who take bigger risks.

The blockbuster acquisitions that happen in the middle of the bull market also often seem insane in the moment, but if the market continues on the up after the fact then they're remembered as sound business decisions rather than as a symptom of mania.

> if there are blockbuster acquisitions every year

There aren’t. They cluster to varying degrees depending on the thresholds one chooses. But the likelihoods are far from uniform.