Workforce Integration and the Dissipation of Value in Mergers: The Case of USAir's Acquisition of Piedmont Aviation
In 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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|Date of creation:||1997|
|Date of revision:|
|Contact details of provider:|| 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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