Privatization and the Market for Corporate Control

J. Harold Mulherin, Jeffry M. Netter and Michael Stegemoller
Additional contact information
J. Harold Mulherin: Claremont McKenna College
Jeffry M. Netter: University of Georgia
Michael Stegemoller: University of Georgia

Claremont Colleges Working Papers from Claremont Colleges

Abstract: We study the wealth effects of the mergers of privatized firms. Our sample entails 39 privatized firms that subsequently become targets of a takeover and 52 privatized firms that become bidders in mergers. Our results indicate that target firms experience a 12 percent increase in equity value at the announcement of a merger. The bidding firms experience a positive but insignificant change in equity value at merger announcement. The results indicate that mergers result in net wealth creation for privatized firms and are consistent with property rights/agency cost theory. The results also offer global, non-U.S. evidence that mergers create wealth.

Date: 2001-05
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.claremontmckenna.edu/rdschool/papers/2001-21.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:clm:clmeco:2001-21

Access Statistics for this paper

More papers in Claremont Colleges Working Papers from Claremont Colleges
Contact information at EDIRC.
Series data maintained by ().