How Have M&As Changed? Evidence from the Sixth Merger Wave

European Journal of Finance, Vol. 18, pp. 663-688, 2012

42 Pages Posted: 30 Jun 2010 Last revised: 21 Sep 2012

See all articles by George Alexandridis

George Alexandridis

ICMA Centre, Henley Business School

Christos P. Mavis

University of Surrey - Surrey Business School

Nickolaos G. Travlos

University of Surrey; ALBA Graduate Business School

Date Written: June 1, 2011

Abstract

We examine the characteristics of the sixth merger wave that started in 2003 and came to an end approximately in late-2007. The drivers of this wave lie primarily in the availability of abundant liquidity, in line with neoclassical explanations of merger waves. Acquirers were less overvalued relative to targets and merger proposals comprised higher cash elements. Moreover, the market for corporate control was less competitive, acquirers were less acquisitive, managers displayed less over-optimism and offers involved significantly lower premiums, indicating more cautious and rational acquisition decisions. Strikingly however, deals destroyed at least as much value for acquiring shareholders as in the 1990s.

Keywords: Merger waves, public acquisitions, premium, shareholder gains, method of payment

JEL Classification: G14, G30, G34

Suggested Citation

Alexandridis, George and Mavis, Christos P. and Travlos, Nickolaos G., How Have M&As Changed? Evidence from the Sixth Merger Wave (June 1, 2011). European Journal of Finance, Vol. 18, pp. 663-688, 2012. Available at SSRN: https://ssrn.com/abstract=1632263

George Alexandridis (Contact Author)

ICMA Centre, Henley Business School ( email )

Whiteknights Campus
P.O. Box 242
Reading, RG6 6BA
United Kingdom
+44 (0) 118 378 4387 (Phone)

Christos P. Mavis

University of Surrey - Surrey Business School ( email )

Guildford, Surrey GU2 7XH
United Kingdom

HOME PAGE: http://www.surrey.ac.uk/people/christos-p-mavis

Nickolaos G. Travlos

University of Surrey ( email )

Guildford
Guildford, Surrey GU2 5XH
United Kingdom

ALBA Graduate Business School ( email )

Athinas Ave. & 2A Areos Str.
Vouliagmeni 166 71, Athens
Greece

HOME PAGE: http://www.alba.edu.gr

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