|
|
|
|
||||
|
||||
Do Merger-Related Operating Synergies Exist?Gennaro BernileUniversity of Miami - School of Business Administration Scott W. BauguessUS Securities & Exchange Commission July 2011 Abstract: Executives frequently forecast large operating efficiency gains from mergers. Using these projections, we study the impact of operating synergies on merger performance. Investors' reaction to mergers varies directly with the availability of these forecasts and the gains they imply, and post-merger operating performance increases with the predictable component of forecasted synergies based on deal characteristics. The realized improvements, however, do not depend on the availability of forecasts or the surprise they convey, and post-merger stock returns reconcile discrepancies between investors' ex ante beliefs and mergers' ex post performance related to management forecasts. Overall, the evidence supports the neoclassical view that expectations and realizations of synergistic gains are important determinants of merger activity and performance.
Number of Pages in PDF File: 48 Keywords: Mergers and Acquisitions, Synergies, Management Forecasts, Merger Performance JEL Classification: G14, G17, G34 working papers seriesDate posted: January 2, 2005 ; Last revised: August 1, 2011Suggested CitationContact Information
|
|
|||||||||||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo7 in 0.515 seconds
