Postacquisition performance of acquiring firms

Loderer, Claudio; Martin, Kennetz (1992). Postacquisition performance of acquiring firms. Financial Management, 21(3), pp. 69-79. Wiley

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We investigate whether negative postacquisition stock-price performance of acquiring firms is a genuine phenomenon or a statistical artifact. Using a comprehensive sample of domestic acquisitions in the 1966-1986 period, we show that acquiring firms underperform a control portfolio only during the three years but not five years following the acquisition. There is evidence of negative performance in the second and third postacquisition years, but that performance occurs mainly in the 1960s and 1970s, and disappears in the 1980s. Thus, especially in the later years, the postacquisition years do not provide convincing evidence of wasteful corporate acquisitions, or strong evidence that contradicts market efficiency.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Business Management > Institute of Financial Management

UniBE Contributor:

Loderer, Claudio

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

0046-3892

Publisher:

Wiley

Language:

English

Submitter:

Karin Dolder

Date Deposited:

24 Jan 2014 09:01

Last Modified:

16 Feb 2015 21:46

BORIS DOI:

10.7892/boris.39532

URI:

https://boris.unibe.ch/id/eprint/39532

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