Corporate Real Estate and Corporate Takeovers: International Evidence
22 Pages Posted: 22 Jan 2008 Last revised: 17 Jul 2009
This study investigates whether corporate real estate ownership is a trigger for takeovers. The empirical analysis is based on a sample covering 225 takeovers in France, Germany, the Netherlands, and the United Kingdom between 1992 and 2003. Using a multivariate probit model that controls for various financial firm characteristics, we find that the role of corporate real estate in takeovers depends on the nature of the takeover, the industry, the period, and the country. The presence of corporate real estate is a significantly positive predictor for takeovers within the same industry. Companies that have been taken over appear to have been reducing their real estate holdings prior to the takeover, which would suggest a financial distress situation.
Keywords: corporate real estate, firm characteristics
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