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Some results about acquisitions during the recent merger waves: 1997-2006

Author

Listed:
  • Houssam Bouzgarrou

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

  • Patrick Navatte

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

Abstract

We investigate the long term performance of mergers and acquisitions undertaken by French firms. Using firms matched on industry, performance and size as a benchmark, we find that operating performance improves following acquisitions both with change and intercept models. We analyze the determinants of post-acquisition performance and we find that the mean of payment, the acquirer size and the acquisition technique have a significant impact on post-acquisition performance. The results indicate that acquisitions paid with cash are more profitable than acquisitions paid with stocks. That bigger is the acquirer lower is the change in operating performance. And that negotiated acquisitions are more profitable than tender offers. We also analyze the relation between long-term operating performance and market reaction around the announcement. We find no statistically significant relation between market prediction and change in operating performance.

Suggested Citation

  • Houssam Bouzgarrou & Patrick Navatte, 2010. "Some results about acquisitions during the recent merger waves: 1997-2006," Post-Print halshs-00466769, HAL.
    • Handle: RePEc:hal:journl:halshs-00466769
    as

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