The influence of leveraged buyouts on target firms' competitors

Marcel Grupp, Christian Rauch, Marc Umber and Uwe Walz ()

No 99, SAFE Working Paper Series from Leibniz Institute for Financial Research SAFE

Abstract: This paper analyzes the influence Leveraged Buyouts (LBOs) have on the operating performance of the LBO target companies' direct competitors. A unique and hand-collected data set on LBOs in the United States in the period 1985-2009 allows us to analyze the effects different restructuring activities as part of the LBO have on the competitors' revenues. These restructuring activities include changes to leverage, governance, or operating business, as well as M&A activities of the LBO target company. We find that although LBOs itself have a negative influence on competitors' revenue growth, some restructuring mechanisms might actually benefit competing companies.

Keywords: Product Market Competition; Peers; LBOs; Restructuring (search for similar items in EconPapers)
JEL-codes: D43 G23 G24 G34 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-cfn and nep-com
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:safewp:99

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