13 The duality of the LBO field Fabien Foureault The process of financialization has been the subject of numerous research projects in recent years, with a number of these discussing the strategy changes of large companies that reorient their approach towards “maximizing shareholder value” (Fligstein and Shin, 2007; Davis, 2009). These studies show in particular that the wave of mergers and hostile takeovers during the 1980s played a catalytic role in the shift from managerial capitalism to shareholder capitalism (Davis and Stout, 1992; Stearns and Allan, 1996; Fligstein, 2001, chap. 7). A number of these deals have been carried out using a technique known as the leveraged buy-out (LBO). An LBO is a corporate acquisition technique with debt. LBOs occur when investors purchase a target company using a combination of debt and equity and attempt to improve its profitability before selling it again after 3 to 5 years. The investors who carry out this type of deal belong to the private equity (PE) sector, which seeks to finance non-listed companies. LBOs ultimately result in the real- location of the property and control rights of companies, making them particular cases of merger and acquisition deals. After their emergence during the 1960s in the United States, LBOs began to spread across Europe and throughout the world in the 1980s and experienced a boom in the 2000s. According to American econo- mists and sociologists, LBOs play the role of a change agent of capitalism: they enable entire sectors and countries to restructure themselves (Jensen, 1989; Davis et al., 2014), and facilitate the diffusion of a new economic rationale inspired in particular by agency theory (Dobbin and Jung, 2010). France has not been an exception to this phenomenon, in spite of its peculiar economic model, which is supposed to be particularly hostile towards such prac- tices (Coriat, 2008). The existence and extraordinary growth of LBOs in France is thus paradoxical because it is a priori improbable. To shed light on this paradox, this chapter will study the agents of change, namely, the main actors involved in the financialization of French companies, using the LBO field as an example. The completion of these deals does not solely involve investors, but also top managers of companies, who themselves become investors, and bankers, who are actively involved in the setting up and monitoring of the deal. These deals can therefore be considered as a three-way game. The use of this technique by these three types of actor forms what we call the LBO field. This chapter analy- ses the LBO field at the organizational level, that is, as an “organizational field” FAW.indb 223 20-04-2017 16:03:20 1st Proofs – Not for Distribution.