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Merger Waves: Are Buyers Following the Herd or Responding to Structural Queues?

Ralph Sonenshine

No 2019-03, Working Papers from American University, Department of Economics

Abstract: While there has been a significant amount of research covering the causes of merger waves, few papers have rank ordered merger waves based on the causes nor sought to determine which rationale leads to higher bidder payouts. This paper seeks to fill this gap by examining a cross section of large, global mergers across most industries occurring over a 17 year period. I find that merger waves over this period are caused foremost by changing economic and regulatory conditions. It is the behavioral rationale of mispricing, however, that more often leads to higher bidder payouts or merger premiums among acquirers in merger waves.

Keywords: mergers and acquisitions; merger premium; behavioral; merger wave (search for similar items in EconPapers)
JEL-codes: G02 G12 G34 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com and nep-ind
Date: 2019
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