Abstract

http://ssrn.com/abstract=199671
 
 

References (44)



 
 

Citations (52)



 
 

Footnotes (5)



 


 



The Post-merger Performance Puzzle


Anup Agrawal


University of Alabama - Culverhouse College of Commerce & Business Administration

Jeffrey F. Jaffe


University of Pennsylvania - Finance Department

December 1999


Abstract:     
While the bulk of the research on the financial performance of mergers and acquisitions has focused on stock returns around the merger announcement, a surprisingly large set of papers has also examined long-run stock returns following acquisitions. We review this literature, concluding that long-run performance is negative following mergers, though performance is non-negative (and perhaps even positive) following tender offers. However, the effects of both methodology (see Lyon, Barber and Tsai (1999)) and chance (see Fama (1998)) may modify this conclusion. Two explanations of under-performance (speed of price-adjustment and EPS myopia) are not supported by the data, while two other explanations (method of payment and performance extrapolation) receive greater support.

Number of Pages in PDF File: 59

JEL Classification: G14, G34

working papers series


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Date posted: January 5, 2000  

Suggested Citation

Agrawal, Anup and Jaffe, Jeffrey F., The Post-merger Performance Puzzle (December 1999). Available at SSRN: http://ssrn.com/abstract=199671 or http://dx.doi.org/10.2139/ssrn.199671

Contact Information

Anup Agrawal (Contact Author)
University of Alabama - Culverhouse College of Commerce & Business Administration ( email )
Culverhouse College of Business
EFLS, Box 870224
Tuscaloosa, AL 35487-0223
United States
205-348-8970 (Phone)
205-348-0590 (Fax)
HOME PAGE: http://old.cba.ua.edu/personnel/AnupAgrawal.html
Jeffrey F. Jaffe
University of Pennsylvania - Finance Department ( email )
The Wharton School
3620 Locust Walk
Philadelphia, PA 19104
United States
215-898-5615 (Phone)
215-898-6200 (Fax)

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References:  44
Citations:  52
Footnotes:  5

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