The Effects of Acquisitions on the Value of Rivals in a Winner-Take-Mostt Economy

Frannois Derrien, Laurent Frrsard, Victoria Slabik and Philip Valta

Working Papers from HAL

Abstract: Average stock price reactions of industry rivals in horizontal U.S. mergers and acquisitions around deal announcements are robustly negative. This finding is in contrast to the results in the existing literature, which focuses on smaller samples of deals involving mostly publicly listed firms. Rivals' returns are more negative in growing and concentrated industries. Moreover, the negative rivals' stock price reactions are related to future decreases in operating performance, increased probability of bankruptcy and challenges by antitrust authorities, and increased probability of rivals' future acquisitions. Overall, these results suggest that M&As have strong competitive effects for the rivals of target companies.

Keywords: M&As (search for similar items in EconPapers)
Date: 2017-05-01
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-01970731

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().