Journal
JOURNAL OF FINANCIAL ECONOMICS
Volume 70, Issue 3, Pages 295-311Publisher
ELSEVIER SCIENCE SA
DOI: 10.1016/S0304-405X(03)00211-3
Keywords
takeover; synergy; merger
Categories
Ask authors/readers for more resources
We present a model of mergers and acquisitions based on stock market misvaluations of the combining firms. The key ingredients of the model are the relative valuations of the merging firms and the market's perception of the synergies from the combination. The model explains who acquires whom, the choice of the medium of payment, the valuation consequences of mergers, and merger waves. The model is consistent with available empirical findings about characteristics and returns of merging firms, and yields new predictions as well. (C) 2003 Elsevier B.V. All rights reserved.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available