The Post-merger Performance of Acquiring Firms: A Re-examination of an Anomaly
AbstractThe existing literature on the post-merger performance of acquiring firms is divided. The authors reexamine this issue, using a nearly exhaustive sample of mergers between NYSE acquirers and NYSE/AMEX targets. The authors find that stockholders of acquiring firms suffer a statistically significant loss of about 10 percent over the five-year post- merger period, a result robust to various specifications. Their evidence suggests that neither the firm size effect nor beta estimation problems are the cause of the negative post-merger returns. They examine whether this result is caused by a slow adjustment of the market to the merger event. Their results do not seem consistent with this hypothesis. Copyright 1992 by American Finance Association.
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Bibliographic InfoArticle provided by American Finance Association in its journal Journal of Finance.
Volume (Year): 47 (1992)
Issue (Month): 4 (September)
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