Workforce Integration and the Dissipation of Value in Mergers: The Case of USAir's Acquisition of Piedmont Aviation
AbstractIn November 1987, USAir Group acquired Piedmont Aviation for $1.6 billion in cash tender offer. Following the acquisition of the two carriers, the new USAir incurred huge operating losses, became the last profitable major airline, sustained a large reduction in its stock price, eliminated its dividend, and came close to bankruptcy. We examine USAir's acquisition of piedmont and its post-merger performance to address the following question -- how can the combination of two highly profitable firms dissipate so much value?
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Bibliographic InfoPaper provided by Rochester, Business - Financial Research and Policy Studies in its series Papers with number 97-07.
Length: 47 pages
Date of creation: 1997
Date of revision:
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Postal: UNIVERSITY OF ROCHESTER, WILLIAM E. SIMON GRADUATE SCHOOL OF BUSINESS ADMINISTRATION, Bradley Policy Research Center, ROCHESTER NEW YORK 14627 U.S.A.
Web page: http://www.simon.rochester.edu/
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ENTERPRISES ; MERGERS ; AIR TRANSPORT;
Find related papers by JEL classification:
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
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- Lars-Hendrik Röller & Johan Stennek & Frank Verboven, 2000.
"Efficiency Gains from Mergers,"
CIG Working Papers
FS IV 00-09, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- Kole, Stacey R. & Lehn, Kenneth M., 1999. "Deregulation and the adaptation of governance structure: the case of the U.S. airline industry," Journal of Financial Economics, Elsevier, vol. 52(1), pages 79-117, April.
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