Measuring the Economic Gains of Mergers and Acquisitions: Is it Time for a Change?
Lloyds TSB Corporate Markets
Cranfield School of Management
In this paper we review the methods of measuring the economic gains of mergers and acquisitions (M&A). We show that the widely employed event study methodology, whether for short or long event windows, has failed to provide meaningful insight and usable lessons regarding the central question of whether mergers and acquisitions create value. We believe the right way to assess the success and therefore the desirability of M&A is through a thorough analysis of company fundamentals. This will require examining smaller samples of transactions with similar characteristics.
Number of Pages in PDF File: 24
Keywords: Mergers & Acquisitions, Takeovers, Wealth Effect, Value Creation, Event Study, Fundamental Analysis
JEL Classification: G14, G34working papers series
Date posted: August 22, 2004 ; Last revised: March 14, 2011
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo5 in 0.813 seconds