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The Impacts of LBOs on the Performance of Acquired Firms:the French Case

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  • Philippe Desbrières

    (Université de Bourgogne LATEC/FARGO)

  • Alain Schatt

Abstract

This paper investigates the financial characteristics and changes in performance of French companies involved in a leveraged buy-out. The empirical study covers a sample of 161 MBOs in France from 1988 to 1994. The acquired firms outperform their counterparts in the same sector of activity before and after the buy-out. However, unlike findings concerning LBOs in the USA and the UK, the performance of French firms falls after the operation is completed. This downturn in performance seems to be less detrimental to former subsidiaries of groups than to former family businesses.

Suggested Citation

  • Philippe Desbrières & Alain Schatt, 2002. "The Impacts of LBOs on the Performance of Acquired Firms:the French Case," Working Papers CREGO 1020702, Université de Bourgogne - CREGO EA7317 Centre de recherches en gestion des organisations.
    • Handle: RePEc:dij:wpfarg:1020702
    Note: article publié dans Journal of Business, Finance and Accounting, vol.29, n°5, juin-juillet 2002, p.695-729.
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    More about this item

    Keywords

    leveraged buy-out; performance; French LBO; family businesses; group subsidiaries.;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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