Abstract

http://ssrn.com/abstract=306750
 
 

References (26)



 
 

Citations (7)



 


 



Does M&A Pay? (Chapter 3)


Robert F. Bruner


University of Virginia - Darden School of Business


Robert F. Bruner, APPLIED MERGERS & ACQUISITIONS, Forthcoming

Abstract:     
Following the largest M&A wave in history, it is appropriate to assess the evidence on the profitability of this activity. One popular view is that merger activity is highly unprofitable. Does research sustain this view? This paper reflects on what it means for M&A to 'pay' and summarizes the evidence from 12 informal studies, 120 scientific studies from 1971 to 2003, and five surveys of the scientific evidence published in 1979, 1983, 1987, 1989, and 1992. This review comments on the several formal and informal research approaches and highlights findings for the broad activity as well as niches of special note. The mass of research suggests that target shareholders earn sizable positive market-returns, that bidders (with interesting exceptions) earn zero adjusted returns, and that bidders and targets combined earn positive adjusted returns. On balance, one should conclude that M&A does pay. But the broad dispersion of findings around a zero return to buyers suggests that executives should approach this activity with caution.

Number of Pages in PDF File: 41

Keywords: Mergers and Acquisitions, Valuation, Corporate Finance

JEL Classification: G34, G30, G31, G32

Accepted Paper Series


Download This Paper

Date posted: August 14, 2003  

Suggested Citation

Bruner, Robert F., Does M&A Pay? (Chapter 3). Robert F. Bruner, APPLIED MERGERS & ACQUISITIONS, Forthcoming. Available at SSRN: http://ssrn.com/abstract=306750 or http://dx.doi.org/10.2139/ssrn.306750

Contact Information

Robert F. Bruner (Contact Author)
University of Virginia (UVA) - Darden School of Business ( email )
P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-7481 (Phone)
HOME PAGE: http://faculty.darden.edu/brunerb/
Feedback to SSRN


Paper statistics
Abstract Views: 14,193
Downloads: 5,214
Download Rank: 650
References:  26
Citations:  7

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo6 in 0.547 seconds