Does Corporate Diversification Destroy Value ?  

Oleh:

Graham, John R. ; Wolf, Jack G. ; Lemmon, Michael L.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 57 no. 2 (2002), page 695-720.
Topik: CORPORATE; studies; acquisitions & mergers; value analysis; stock prices; conglomerates; diversification; lines of business reporting
Fulltext: p 695.pdf (143.04KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88.5 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

We analyze several hundred firms that expand via acquisition and / or increase their number of business segments. The combined market reaction to acqusiition announcements is positive but acquiring firm excess values decline after the diversifying event. Much of these excess value reduction occurs because our sample firms acquire already discounted business units, and not because diversifying destroys values. This implies that the standard assumption that conglomerate divisions canbe benchmarked to tupical stand - alone firms should be carefully reconsidered. We also show that excess value does not decline when firms increase their number of business segments because of pure reporting changes.

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