Examining the performance of corporate acquisitions based on the motive for the acquisition.

Title: Examining the performance of corporate acquisitions based on the motive for the acquisition.
Identifier: AAI3103139
identifier: 3103139
Creator: Markelevich, Ariel.
Contributor: Adviser: Joseph Weintrop
Date: 2003
Language: English
Publisher: City University of New York.
Subject: Business Administration, Accounting | Business Administration, General
Abstract: Mergers and acquisitions are an important economic activity, yet extensive research has shown that acquirers experience, on average, non-positive returns as a result of acquisitions. I address this paradox by differentiating among mergers on the basis of the motives underlying each acquisition. Using merger motives to partition the sample of acquisitions, I distinguish between value-enhancing mergers (conjectured as motivated by synergy) and value-reducing mergers (inferred as motivated by agency). These two merger sub-samples are then analyzed to study the long-term performance of the firms in each group. Results indicate that synergy-motivated acquisitions outperform agency-motivated acquisitions up to three years following the acquisition. Furthermore, I find that the best indicator of the motive for the acquisition is achieved by using a combination of the stock market reaction to the acquisition announcement and ex-ante accounting information.
Type: dissertation
Source: PQT Legacy CUNY.xlsx
degree: Ph.D.

Media: Examining the performance of corporate acquisitions based on the motive for the acquisition.