It simply makes economic sense to substitute debt for equity, and that's what leveraged takeovers and levereage buyouts do.

FORBES: How The Government Subsidizes Leveraged Takeovers

But as the industry grew in Europe in the 1970s and 1980s, American-style high-profile, highly-leveraged buyouts and hostile takeovers were mostly eschewed in favour of smaller buyouts of unwanted bits of conglomerates.

ECONOMIST: Face value

Less income after tax will result in lower marketplace valuations and leave equity-rich companies more vulnerable to takeovers or leveraged buyouts.

FORBES: Tax Code Rewards Debt, Penalizes Dividends