Post-Merger Restructuring and the Boundaries of the Firm

Vojislav Maksimovic, Gordon Phillips and Nagpurnanand Prabhala

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: We examine how firms redraw their boundaries after acquisitions using plant-level data. We find that there is extensive restructuring in a short period following mergers and full-firm acquisitions. Acquirers of full firms sell 27% and close 19% of the plants of target firms within three years of the acquisition. Acquirers with skill in running their peripheral divisions tend to retain more acquired plants. Retained plants increase in productivity whereas sold plants do not. These results suggest that acquirers restructure targets in ways that exploit their comparative advantage.

Pages: 55 pages
Date: 2011-04
New Economics Papers: this item is included in nep-bec, nep-com, nep-eff and nep-ind
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Citations: View citations in EconPapers (80)

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https://www2.census.gov/ces/wp/2011/CES-WP-11-11.pdf First version, 2011 (application/pdf)

Related works:
Journal Article: Post-merger restructuring and the boundaries of the firm (2011)
Working Paper: Post-Merger Restructuring and the Boundaries of the Firm (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:11-11

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