Workforce Integration and the Dissipation of Value in Mergers: The Case of USAir's Acquisition of Piedmont Aviation

S.R. Kole and K. Lenh

Working Papers from Rochester, Business - Financial Research and Policy Studies

Abstract: In November 1987, USAir Group acquired Piedmont Aviation for $1.6 billion in cash tender offer. Following the acquisition of the two carriers, the new USAir incurred huge operating losses, became the last profitable major airline, sustained a large reduction in its stock price, eliminated its dividend, and came close to bankruptcy. We examine USAir's acquisition of piedmont and its post-merger performance to address the following question -- how can the combination of two highly profitable firms dissipate so much value?

Keywords: ENTERPRISES; MERGERS; AIR TRANSPORT (search for similar items in EconPapers)
JEL-codes: G30 G34 L93 (search for similar items in EconPapers)
Pages: 47 pages
Date: 1997
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:fth:robufr:97-07

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