Visiting the paradox of the upward trends of mergers and acquisitions in the USA in times of poor financial performance

Ioannis A. Tampakoudis

International Journal of Trade and Global Markets, 2010, vol. 3, issue 4, 341-358

Abstract: The economic consequences deriving from the activity of mergers and acquisitions to US bidders are not supportive of its increasing tendency diachronically. Clearly, positive returns are recorded before and during the third merger wave, while in the fourth quarter of the last century the empirical results deviate significantly. Some key determining parameters are the acquisition mood, the method of payment, the managers' incentives, the targets' characteristics, the number of bidders and the business climate. Nevertheless, mergers and acquisitions are fundamentally dependant of personal/managerial objectives, accounting for the pace of the activity despite the unpromising consequences indicated in the empirical results.

Keywords: mergers; M&A; tender offers; abnormal returns; payment methods; bidders; managerial incentives; hybris hypothesis; acquisitions; United States; USA; financial performance; acquisition mood; targets; hubris; business climate; personal objectives; managerial objectives; economic consequences. (search for similar items in EconPapers)
Date: 2010
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