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How Do Takeovers Create Synergies? Evidence From France

Listed author(s):
  • HAMZA Taher

    (IHEC, University of Carthage, VALLOREM Lab, Université d’Orléans, France)

  • SGHAIER Adnène

    (ISG, University of Sousse, Tunisia)

  • THRAYA Mohamed Firas

    (Poitiers School of Management, France)

Registered author(s):

    Based on bidder-target asymmetry, our study investigates the source of synergy gains derived from corporate takeovers and their specific contribution to bidder value creation. Prior researches have focused on the relevance of only one source of potential synergy. We find that French takeovers tend to create long-term operating and financial synergies. These two synergy components are positive and significant with a large contribution of the former. Furthermore, cutbacks in investment expenditures represent the most significant source of operating synergies, while post-acquisition market power is non-significant. Moreover, both total and operating synergies are higher in focused takeovers initiated by “value” as opposed to "glamour" bidders. Lastly, financial synergies are likely to arise from bidder leverage level and target relative size.

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    File URL: http://eccsf.ulbsibiu.ro/RePEc/blg/journl/11105hamza&sghaier&thiraya.pdf
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    Article provided by Lucian Blaga University of Sibiu, Faculty of Economic Sciences in its journal Studies in Business and Economics.

    Volume (Year): 11 (2016)
    Issue (Month): 1 (April)
    Pages: 54-72

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    Handle: RePEc:blg:journl:v:11:y:2016:i:1:p:54-72
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    Lucian Blaga University of Sibiu, Faculty of Economic Sciences Dumbravii Avenue, No 17, postal code 550324, Sibiu, Romania

    Phone: 004 0269 210375
    Fax: 004 0269 210375
    Web page: http://economice.ulbsibiu.ro/
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