Acquisiton Strategies: Empirical Evidence of Outsider-Toeholds

Tobias Lindqvist ()

No 634, Working Paper Series from Research Institute of Industrial Economics

Abstract: Theoretically, cross ownership may mitigate mergers, i.e. market concentrations. Holding a share in a competing firm before the acquisition of another firm, outsider-toehold, is more profitable in some market constellations, due to the positive externality on the outsider (competing) firm when a merger occurs. The purposes of this paper are to empirically observe when US firms buy outsider-toeholds and through event-studies estimate the gains of buyers, outsider firms and competitors when firms holding outsider-toeholds merge.

Keywords: Acquisition; Antitrust; Insiders’ Dilemma; Mergers; Toeholds (search for similar items in EconPapers)
JEL-codes: G34 L12 L13 L41 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2005-01-24
New Economics Papers: this item is included in nep-com
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0634

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