Wealth Destruction on a Massive Scale? A Study of Acquiring‐Firm Returns in the Recent Merger Wave
Sara B. Moeller,
Frederik Schlingemann () and
René Stulz
Journal of Finance, 2005, vol. 60, issue 2, 757-782
Abstract:
Acquiring‐firm shareholders lost 12 cents around acquisition announcements per dollar spent on acquisitions for a total loss of $240 billion from 1998 through 2001, whereas they lost $7 billion in all of the 1980s, or 1.6 cents per dollar spent. The 1998 to 2001 aggregate dollar loss of acquiring‐firm shareholders is so large because of a small number of acquisitions with negative synergy gains by firms with extremely high valuations. Without these acquisitions, the wealth of acquiring‐firm shareholders would have increased. Firms that make these acquisitions with large dollar losses perform poorly afterward.
Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (431)
Downloads: (external link)
https://doi.org/10.1111/j.1540-6261.2005.00745.x
Related works:
Working Paper: Wealth Destruction on a Massive Scale? A Study of Acquiring-Firm Returns in the Recent Merger Wave (2004) 
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:bla:jfinan:v:60:y:2005:i:2:p:757-782
Ordering information: This journal article can be ordered from
http://www.afajof.org/membership/join.asp
Access Statistics for this article
More articles in Journal of Finance from American Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().