Wealth Destruction on a Massive Scale? A Study of Acquiring-Firm Returns in the Recent Merger Wave
Acquiring-firm shareholders lost 12 cents around acquisition announcements per dollar spent on acquisitions for a total loss of $240 billion from 1998 through 2001, whereas they lost $7 billion in all of the 1980s, or 1.6 cents per dollar spent. The 1998 to 2001 aggregate dollar loss of acquiring-firm shareholders is so large because of a small number of acquisitions with negative synergy gains by firms with extremely high valuations. Without these acquisitions, the wealth of acquiring-firm shareholders would have increased. Firms that make these acquisitions with large dollar losses perform poorly afterwards
Year of publication: |
[2004]
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Authors: | Moeller, Sara B. |
Other Persons: | Schlingemann, Frederik P. (contributor) ; Stulz, René M. (contributor) |
Publisher: |
[2004]: [S.l.] : SSRN |
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