A unified theory of forward‐ and backward‐looking M&As and divestitures

Qing Ma and Susheng Wang

European Financial Management, 2018, vol. 24, issue 3, 418-450

Abstract: In a unified theory of forward‐ and backward‐looking mergers and acquisitions (M&As) and divestitures, an M&A today may be a cause for a divestiture in the future; conversely a divestiture today may be a consequence of an M&A in the past. M&As and divestitures are not only two sides of the same coin, they are also causes and consequences of each other. In this paper, in a two‐period model, two firms consider integrating or separating in each period. We analyze forward‐ and backward‐looking M&As and divestitures, and compare them with static M&As and divestitures.

Date: 2018
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https://doi.org/10.1111/eufm.12131

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Persistent link: https://EconPapers.repec.org/RePEc:bla:eufman:v:24:y:2018:i:3:p:418-450

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