Disentangling the link between stock and accounting performance in acquisitions

While empirical studies that use event-study methodology find on average that the gains from mergers and acquisitions are positive, those focusing on accounting figures tend to find a significant drop in performance. We argue that each of the four possible combinations between positive or negative abnormal stock returns and accounting performance is due to a distinct acquisition motive. We find strong empirical evidence in support of this claim. -- Mergers and acquisitions ; performance measurement ; synergies ; preemption ; overvaluation ; corporate governance ; agency problems