Efficient Mechanisms For Mergers And Acquisitions
AbstractWe characterize incentive-efficient merger outcomes when payments can be made both in cash and stock. Each firm has private information about both its stand-alone value and a component of the (possibly negative) potential synergies. We study two cases: when transfers can, and cannot, be made contingent on the value of any new firm. When they can, we show that redistributing shares of any nonmerging firm generates information rents and provides necessary and sufficient conditions for the implementability of efficient merger rules. When they cannot, private information undermines efficiency more when it concerns stand-alone values than synergies. Here, acquisitions emerge as optimal mechanisms. Copyright 2007 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.
Volume (Year): 48 (2007)
Issue (Month): 3 (08)
Contact details of provider:
Postal: 160 McNeil Building, 3718 Locust Walk, Philadelphia, PA 19104-6297
Phone: (215) 898-8487
Fax: (215) 573-2057
Web page: http://www.econ.upenn.edu/ier
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Koppl, Thorsten V. & Monnet, Cyril, 2007. "Guess what: It's the settlements! Vertical integration as a barrier to efficient exchange consolidation," Journal of Banking & Finance, Elsevier, vol. 31(10), pages 3013-3033, October.
- Robinson, David T., 2009. "Size, ownership and the market for corporate control," Journal of Corporate Finance, Elsevier, vol. 15(1), pages 80-84, February.
- Vlad Mares & Mikhael Shor, 2008. "Industry concentration in common value auctions: theory and evidence," Economic Theory, Springer, vol. 35(1), pages 37-56, April.
- Mike Burkart & Samuel Lee, 2010.
"Signaling in Tender Offer Games,"
FMG Discussion Papers
dp655, Financial Markets Group.
- Banal-Estanol, Albert & Heidhues, Paul & Nitsche, Rainer & Seldeslachts, Jo, 2009.
"Screening and Merger Activity,"
Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
270, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Vasiliki Skreta & Nicolas Figueroa, 2007.
"What to Put on the Table,"
843644000000000374, UCLA Department of Economics.
- Vasiliki Skreta & Nicolas Figueroa, 2008. "What to Put on the Table," Working Papers 08-11, New York University, Leonard N. Stern School of Business, Department of Economics.
- Nicolas Figueroa & Vasiliki Skreta, 2007. "What to put in the table," Documentos de Trabajo 237, Centro de Economía Aplicada, Universidad de Chile.
- Bulow, Jeremy I & Klemperer, Paul, 2007.
"When are Auctions Best?,"
CEPR Discussion Papers
6393, C.E.P.R. Discussion Papers.
- Jeremy Bulow & Paul Klemperer, 2007. "When are Auctions Best?," Economics Papers 2007-W03, Economics Group, Nuffield College, University of Oxford.
- Jeremy I. Bulow & Paul D. Klemperer, 2007. "When are Auctions Best?," NBER Working Papers 13268, National Bureau of Economic Research, Inc.
- Bulow, Jeremy I. & Klemperer, Paul D., 2007. "When Are Auctions Best?," Research Papers 1973, Stanford University, Graduate School of Business.
- Gärtner, Dennis & Schmutzler, Armin, 2006.
"Merger Negotiations and Ex-Post Regret,"
CEPR Discussion Papers
5911, C.E.P.R. Discussion Papers.
- Gao, Ning, 2011. "The adverse selection effect of corporate cash reserve: Evidence from acquisitions solely financed by stock," Journal of Corporate Finance, Elsevier, vol. 17(4), pages 789-808, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or ().
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.