Economics at your fingertips  

Are Acquisitions Worthwhile? An Empirical Study of the Post-Acquisition Performance of Privately Held Belgian Companies

Hubert Ooghe, Elisabeth Laere and Tine Langhe

Small Business Economics, 2006, vol. 27, issue 2, 223-243

Abstract: Few studies have addressed the performance of smaller unquoted companies involved in acquisitions, especially in Continental European countries. Therefore this study addresses the post-acquisition financial characteristics of privately held companies involved in 143 Belgian acquisitions between 1992 and 1994. Specifically, this paper examines the financial performance of the acquiring firm after the acquisition, using statistical analysis of industry-adjusted variables. Our findings show that following the acquisition, the profitability, the solvency and the liquidity of most of the combined companies decline. This decline is also reflected in the failure prediction scores. With respect to the added value, acquisitions are found to be accompanied by increases in the labour productivity, but this is caused by the general improvement of gross added value per employee of Belgian companies in the last 10 years. So it seems that, contrary to the general expectations and beliefs, acquisitions usually do not seem to improve the acquirer’s financial performance. Copyright Springer 2006

Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

Downloads: (external link) (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:

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/11187/PS2

DOI: 10.1007/s11187-006-0011-1

Access Statistics for this article

Small Business Economics is currently edited by Zoltan J. Acs and David B. Audretsch

More articles in Small Business Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

Page updated 2020-12-03
Handle: RePEc:kap:sbusec:v:27:y:2006:i:2:p:223-243