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Does Common Ownership Increase Incentives for Mergers and Acquisitions?

BY | May 21, 2019

By Miguel Antón, José Azar, Mireia Giné & Luca X. Lin –  Acquisitions are on average value-destroying for acquirer shareholders, while it has been shown that non-merging rivals generally gain…

By Miguel Antón, José Azar, Mireia Giné & Luca X. Lin – 

Acquisitions are on average value-destroying for acquirer shareholders, while it has been shown that non-merging rivals generally gain after such “bad deals.” Value-destroying acquisitions have been largely attributed to managerial discretion, yet why do shareholders approve such decisions? This article illustrates that acquirer shareholders holding a diversified industry portfolio can benefit from value-destroying acquis

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