Abstract

http://ssrn.com/abstract=1518494
 
 

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Target Firm-Specific Information and Acquisition Efficiency


Xiumin Martin


Washington University in Saint Louis - Olin School of Business

Ron Shalev


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

September 2, 2015

Management Science, Forthcoming

Abstract:     
This study investigates whether firm-specific information about targets improves acquisition efficiency. We define acquisition efficiency as the total surplus generated by an acquisition (Vickrey 1961; Milgrom 1989) and measure it as the difference in the value of the merged firm and the sum of the two firms operating separately. We find a positive association between target firm-specific information and acquisition efficiency that is driven mainly by diversifying acquisitions. Additional evidence suggests that both the likelihood of the withdrawal of an announced acquisition and the likelihood of a future divestiture of a target decrease with target firm-specific information. Taken together, our findings suggest that the availability of this information improves merger and acquisitions efficiency.

Number of Pages in PDF File: 51


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Date posted: December 5, 2009 ; Last revised: September 21, 2015

Suggested Citation

Martin, Xiumin and Shalev, Ron, Target Firm-Specific Information and Acquisition Efficiency (September 2, 2015). Management Science, Forthcoming. 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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