Shareholder Wealth Effects of Corporate Takeovers PDF Download
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Author: Julian R. Franks
Publisher:
ISBN:
Category :
Languages : en
Pages : 58
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Author: Julian R. Franks
Publisher:
ISBN:
Category :
Languages : en
Pages : 58
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Author: Huainan Zhao
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author:
Publisher:
ISBN:
Category : Consolidation and merger of corporations
Languages : en
Pages : 0
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Author: United States. Securities and Exchange Commission. Office of the Chief Economist
Publisher:
ISBN:
Category : Consolidation and merger of corporations
Languages : en
Pages : 36
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Book Description
Author: David J. Ravenscraft
Publisher: Brookings Institution Press
ISBN: 9780815723172
Category : Business & Economics
Languages : en
Pages : 316
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Book Description
This book covers the consolidation and merger of corporations and corporate divestiture in the United States.
Author: George Alexandrou
Publisher:
ISBN:
Category :
Languages : en
Pages : 34
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Whether corporate acquisitions create or destroy value for shareholders is still an unresolved issue. One type of corporate acquisition is made when another firm carries out a divestiture. Evidence on the wealth effects of such partial acquisitions is limited to a few US studies. This study examines the wealth experience of buyers in 877 UK corporate divestitures during 1987-93 and seeks to identify the factors determining the wealth gains. We focus on value created by the acquirer through its business strategy and by exploiting its growth opportunities and on value distributed from the seller to the buyer due to the relative bargaining power of the seller and the buyer. We find that buyers experience significant buy and hold abnormal returns of 0.48% over three days following the divestiture announcement. Thus in contrast to many full takeovers, partial acquisitions create value. We also report that buyers enjoy larger gains when they buy from financially healthy sellers and during recessions. Economic environment rather than firm-specific growth opportunities lead to higher returns. Materially larger purchases create more value. UK buyers buying UK divisions of the seller have an information advantage over UK purchasers of foreign divisions and experience larger wealth increases. The study highlights the importance of environmental, firm-specific and transactional characteristics in determining the value gains from partial acquisitions.
Author: Marc Goergen
Publisher:
ISBN:
Category :
Languages : en
Pages : 46
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In this paper, we analyse the short-term wealth effects of large (intra) European takeover bids. We find large announcement effects of 9% for target firms, but the cumulative abnormal return that includes the price run-up over the two-week period prior to the event rises to 20%. The share price of the bidding firms reacts positively with a statistically significant announcement effect of only 0.7%. We also show that the type of takeover bid has a large impact on the short term-wealth effects of target and bidder shareholders with hostile takeovers triggering substantially larger price reactions than friendly mergers and acquisitions. When a UK target or bidder is involved, the abnormal returns outperform those of Continental European bids. We also find strong evidence that the means of payment in an offer has a large impact on the share price reactions. High market-to-book ratio of the target lead to a higher bid premium combined but trigger a negative price reaction for the bidding firm. Bidding firms should not further diversify by acquiring target firms that do not match the bidder's core business. We also investigate whether the predominant reason for takeovers is synergies, agency problems or managerial hubris. We find a significant positive correlation between target shareholder gains and total gains for the merged entity as well as between target gains and bidder gains. This suggests that synergies are the prime motivation for bids and that targets and bidders tend to share the resulting wealth gains.
Author: Robert Tate Dobson
Publisher:
ISBN:
Category : Consolidation and merger of corporations
Languages : en
Pages : 166
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Author: Moshfique Uddin
Publisher: Routledge
ISBN: 1135045151
Category : Business & Economics
Languages : en
Pages : 209
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Book Description
Cross-border mergers and acquisitions (CBM&As) activity has become an important vehicle for firms’ internationalization and corporate restructuring over the past three decades. Despite the huge volume of global CBM&A activity, however, there are few books which carefully explore the strategies, motives, and consequences of global mergers and acquisitions. This book discusses and synthesizes the theoretical literature on the motivation and performance of international merger activities. Focusing on the UK as a top acquiring country in the European Union, the authors explore the recent trends in cross-border mergers and acquisitions, motives for cross-border mergers and acquisitions, the mergers integration process, home and host countries’ macroeconomic consequences on mergers and acquisitions, and shareholder’s wealth effects on CBM&A. This book explores and sheds much-needed light on the UK CBM&A market, what drives it, and what lessons can be learned for other regions around the globe.
Author: Linda K. Gray
Publisher:
ISBN:
Category : Consolidation and merger of corporations
Languages : en
Pages : 146
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