Wealth Destruction on A Massive Scale ? A Study of Acquiring-Firm Returns in the Recent Merger Wave  

Oleh:

Schlingemann, Frederik P. ; Moeller, Sara B. ; Stulz, Rene M.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 60 no. 2 (Apr. 2005), page 757-782.
Topik: mergers; studies; scquisitions & mergers; financial performance; regression analysis; valuation; shareholders wealth; return on investment
Fulltext: p 757.pdf (222.51KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Acquiring - firm shareholders lost 12 cents around acquisition announcements per dollar spent on acquisitions for a total loss of $240 billion from 1998 through 2001, whereas they lost $7 billion in all of the 1980s, or 1.6 cents per dollar spent. The 1998 to 2001 aggregate dollar loss of acquiring - firm shareholders is so large because of a small number of acquisitions with negative synergy gains by firms with extremely high valuations. Without these acquisitions, the wealth of acquiring-firm shareholders would have increased. Firms that make these acquisitions with large dollar losses perform poorly afterward. Since the firms making these large loss deals were serial acquirers, it is possible that the acquisition demonstrates to investors that the acquiring firm's strategy of growing through acquisitions is no longer sustainable and will not create as much value as they believed previously.

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