We examine the economic benefits of acquisitions of U.S. public firms. Estimating revelation biases concerning internal investment opportunities, we find that it produces a significant negative bidder announcement effect, often interpreted as shareholder wealth destruction. Examining exogenously...

We show that minority acquisitions are more common for targets in countries with worse information environments. The effect is stronger for diversifying acquisitions, deals for high-tech targets, and when the bidder has prior acquisition experience. Minority acquisitions can also be a...

The market for corporate control is generally regarded as an important disciplinary mechanism in well developed economies. Entrenchment mechanisms commonly used by US firms in the form of anti-takeover provisions (ATPs) may offer some protection from disciplinary action, facilitating...

This paper examines the relationship between firm size, sovereign governance, and value-creation in acquisitions. The takeover literature suggests that size can enable managerial entrenchment and value-destruction. However, in weak governance environments, size might have off-setting benefits,...

The desirability of anti-takeover provisions (ATPs) is a contentious issue. ATPs might enable managerial empire building by insulating managers from disciplinary takeovers. However, some companies, such as ‘hard-to-value' (HTV) companies, might trade at a discount due to valuation...

This paper uses the EU Takeover Directive as a natural experiment to test when legal harmonization creates value, and to examine the impact of increased entrenchment on investment decisions. The EU promulgated the Takeover Directive in April 2004. The implementation deadline was May 2006. The...