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http://ssrn.com/abstract=1518494
 
 

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Target Firm-Specific Information and Expected Synergies in Acquisitions


Xiumin Martin


Washington University in Saint Louis - Olin School of Business

Ron Shalev


New York University (NYU) - Leonard N. Stern School of Business

December 4, 2009


Abstract:     
This study investigates the relation between target’s firm-specific information expected synergies in acquisitions. We find that both combined (acquirer and target) stock returns around acquisition announcement and post acquisition performance of the combined entity positively associate with the pre-acquisition level of target firm-specific information. We also find that this association is driven mainly by cross-industry acquisitions. Further analysis suggests that while acquirer shareholders benefit from target firm-specific information, target shareholder returns around acquisition announcement decrease with target firm-specific information. Finally, we find that the likelihood of an announced acquisition to be withdrawn subsequent to the announcement decreases with target firm-specific information.

Number of Pages in PDF File: 50

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Date posted: December 5, 2009 ; Last revised: December 17, 2009

Suggested Citation

Martin, Xiumin and Shalev, Ron, Target Firm-Specific Information and Expected Synergies in Acquisitions (December 4, 2009). Available at SSRN: http://ssrn.com/abstract=1518494 or http://dx.doi.org/10.2139/ssrn.1518494

Contact Information

Xiumin Martin
Washington University in Saint Louis - Olin School of Business ( email )
Saint Louis, MO 63130
United States
Ron Shalev (Contact Author)
New York University (NYU) - Leonard N. Stern School of Business ( email )
44 West 4th Street
New York, NY NY 10012
United States
2129980418 (Phone)
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References:  44
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