Life after takeover

Investigates economic consequences of takeovers by analysing profitability of enterprises acquired as a direct or indirect result of tender offers. 9 years after takeover, acquired lines of business had operating income/assets percentages 3.10 points below those of nontender lines with similar indus...

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Bibliographic Details
Published in:The Journal of industrial economics 1987-12, Vol.36 (Dec 87), p.147-156
Main Authors: Ravenscraft, D J, Scherer, F M
Format: Article
Language:English
Subjects:
Factors
Manufacturing industries
Profitability
Takeovers
USA
Online Access:Get full text
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Summary:Investigates economic consequences of takeovers by analysing profitability of enterprises acquired as a direct or indirect result of tender offers. 9 years after takeover, acquired lines of business had operating income/assets percentages 3.10 points below those of nontender lines with similar industry bases, market shares, and merger accounting methods. Most of the targets' posttakeover profit decline stemmed from asset value writeups. There is no indication that on average the acquirers raised their targets' operating profitability, net of merger related accounting adjustments. (Abstract amended)
ISSN:0022-1821