The timing and terms in mergers and acquisitions motivated by economies of scale and risk diversification

Yuanbin Wang

International Journal of Information and Decision Sciences, 2014, vol. 6, issue 3, 248-261

Abstract: In this paper, we analyse the mergers and acquisitions motivated by economies of scale and risk diversification via real option approach. The model shows that the bidder and the target firm simultaneously exercise their own exchange options when the ratio of two product prices reaches either the lower threshold from below or the higher threshold from above, and the shares of two firms in the post-merger firm are determined endogenously.

Keywords: real options; mergers and acquisitions; economies of scale; risk diversification; decision science; M%A timing; M%A terms. (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=64445 (text/html)
Access to full text is restricted to subscribers.

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:ids:ijidsc:v:6:y:2014:i:3:p:248-261

Access Statistics for this article

More articles in International Journal of Information and Decision Sciences from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().