Impacts of Relative Size and Industrial Relatedness on Returns to Shareholders of Acquiring Firms
The premise of this paper is that in mergers the manageability of acquisitions significantly affects the wealth of shareholders of acquiring firms. Specifically, the relative size of partners as well as the industrial relatedness of the two firms are examined. The test period allows for the determination of announcement, interim, and consummation effects of the mergers on shareholder wealth. It is found that acquisitions of relatively large firms from unrelated industries lead to significant declines in the wealth of shareholders of acquiring firms, and that this result is most pronounced when the period is extended beyond the announcement through the effective dates.
Year of publication: |
1989
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Authors: | Scanlon, Kevin P ; Trifts, Jack W ; Pettway, Richard H |
Published in: |
Journal of Financial Research. - Southern Finance Association - SFA, ISSN 0270-2592. - Vol. 12.1989, 2, p. 103-12
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Publisher: |
Southern Finance Association - SFA Southwestern Finance Association - SWFA |
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