IDEAS home Printed from https://ideas.repec.org/a/cai/ecoldc/ecop_178_0051.html

It Takes Two to Tango.. La fusion : exercice de deux options réelles

Author

Listed:
  • Moez Souissi
  • Pierre Lasserre

Abstract

We analyze mergers from the standpoint of the merging firms. We show that the date of completion of a decentralized merger is suboptimal. The reason is that the merger is a simultaneous decision by two firms, and that its date is therefore determined by their strategic considerations. We model the merger as the simultaneous exercise of two real options and introduce two bargaining mechanisms for the division of the merger rent: the Stackelberg game and the Rubinstein game. In the first, which applies to hostile mergers, all the bargaining power rests with one firm. In the second, which is more suitable for assessing friendly mergers, neither firm has a negotiating advantage. In both cases, we show that the merger occurs at a date that is Pareto suboptimal because too delayed. This phenomenon is more pronounced in hostile mergers than in friendly mergers.

Suggested Citation

  • Moez Souissi & Pierre Lasserre, 2007. "It Takes Two to Tango.. La fusion : exercice de deux options réelles," Economie & Prévision, La Documentation Française, vol. 0(2), pages 51-65.
    • Handle: RePEc:cai:ecoldc:ecop_178_0051
    as

    Download full text from publisher

    File URL: http://www.cairn.info/load_pdf.php?ID_ARTICLE=ECOP_178_0051
    Download Restriction: free
    File URL: http://www.cairn.info/revue-economie-et-prevision-1-2007-2-page-51.htm
    Download Restriction: free
    ---><---

    Other versions of this item:

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cai:ecoldc:ecop_178_0051. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jean-Baptiste de Vathaire (email available below). General contact details of provider: https://www.cairn.info/revue-economie-et-prevision.htm .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.