Merger Failure and Merger Profitability
AbstractThe focus of this paper is the effect of merger proposals on the expected profitability of the bidder and the target. The authors illustrate how an unsuccessful bid may increase the profitability of the target but reduce the profitability of the bidding firm, relative to the profitability of the firms before the merger offer. The profitability of a merger proposal is lowered due to learning from rejection. The authors use their theoretical model to explain empirical work on this issue. Copyright 1993 by Blackwell Publishing Ltd.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Journal of Industrial Economics.
Volume (Year): 41 (1993)
Issue (Month): 4 (December)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821
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- Thomas Borek & Stefan Buehler & Armin Schmutzler, 2002.
"Weddings with Uncertain Prospects – Mergers under Asymmetric Information,"
SOI - Working Papers
0213, Socioeconomic Institute - University of Zurich, revised Feb 2004.
- Borek, Thomas & Bühler, Stefan & Schmutzler, Armin, 2003. "Weddings with Uncertain Prospects - Mergers under Asymmetric Information," CEPR Discussion Papers 3839, C.E.P.R. Discussion Papers.
- Thomas Borek & Stefan Buehler & Armin Schmutzler, 2004. "Mergers under Asymmetric Information – Is there a Lemons Problem?," SOI - Working Papers 0408, Socioeconomic Institute - University of Zurich.
- Albert Banal-Estañol & Jo Seldeslachts, 2005.
CIG Working Papers
SP II 2005-09, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- Gärtner, Dennis & Schmutzler, Armin, 2006.
"Merger Negotiations and Ex-Post Regret,"
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5911, C.E.P.R. Discussion Papers.
- Hankir, Yassin & Rauch, Christian & Umber, Marc P., 2011. "Bank M&A: A market power story?," Journal of Banking & Finance, Elsevier, vol. 35(9), pages 2341-2354, September.
- Thomas Borek & Stefan Bühler & Armin Schmutzler, 2008. "Analyzing Mergers under Asymmetric Information: A Simple Reduced-Form Approach," University of St. Gallen Department of Economics working paper series 2008 2008-15, Department of Economics, University of St. Gallen.
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