Abstract

http://ssrn.com/abstract=1809916
 
 

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Post-Merger Restructuring and the Boundaries of the Firm


Vojislav Maksimovic


University of Maryland - Robert H. Smith School of Business

Gordon M. Phillips


University of Southern California; National Bureau of Economic Research (NBER)

Nagpurnanand R. Prabhala


University of Maryland - Robert H. Smith School of Business

April 1, 2011

US Census Bureau Center for Economic Studies Paper No. CES-WP-11-11

Abstract:     
We examine how firms redraw their boundaries after acquisitions using plant-level data. We find that there is extensive restructuring in a short period following mergers and full-firm acquisitions. Acquirers of full firms sell 27% and close 19% of the plants of target firms within three years of the acquisition. Acquirers with skill in running their peripheral divisions tend to retain more acquired plants. Retained plants increase in productivity whereas sold plants do not. These results suggest that acquirers restructure targets in ways that exploit their comparative advantage.

Number of Pages in PDF File: 55

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Date posted: April 17, 2011  

Suggested Citation

Maksimovic, Vojislav and Phillips, Gordon M. and Prabhala, Nagpurnanand R., Post-Merger Restructuring and the Boundaries of the Firm (April 1, 2011). US Census Bureau Center for Economic Studies Paper No. CES-WP-11-11. Available at SSRN: http://ssrn.com/abstract=1809916 or http://dx.doi.org/10.2139/ssrn.1809916

Contact Information

Vojislav Maksimovic
University of Maryland - Robert H. Smith School of Business ( email )
Van Munching Hall
College Park, MD 20742-1815
United States
301-405-2125 (Phone)
301-314-9157 (Fax)
HOME PAGE: http://www.rhsmith.umd.edu/finance/vmax/
Gordon M. Phillips (Contact Author)
University of Southern California ( email )
Marshall School of Business
Los Angeles, CA 90089
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Nagpurnanand R. Prabhala
University of Maryland - Robert H. Smith School of Business ( email )
4427 Van Munching Hall
College Park, MD 20742-1815
United States
301-405-2165 (Phone)
301-405-0359 (Fax)
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