Stock market driven acquisitions

Andrei Shleifer and Robert W. Vishny

Scholarly Articles from Harvard University Department of Economics

Abstract: We present a model of mergers and acquisitions based on stock market misvaluations of the combining firms. The key ingredients of the model are the relative valuations of the merging firms and the market’s perception of the synergies from the combination. The model explains who acquires whom, the choice of the medium of payment, the valuation consequences of mergers, and merger waves. The model is consistent with available empirical findings about characteristics and returns of merging firms, and yields new predictions as well.

Date: 2003
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Citations: View citations in EconPapers (633)

Published in Journal of Financial Economics

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Journal Article: Stock market driven acquisitions (2003)
Working Paper: Stock Market Driven Acquisitions (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:hrv:faseco:30748164

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