How do valuations impact outcomes of asset sales with heterogeneous bidders?

Differences among bidder type-specific outcomes of asset sales are theoretically related to differences in bidders’ valuations and participation. The lead application to quantify these relations is takeover auctions: bidders are classified into strategic and financial, and bids are available. I structurally estimate valuations from all bids. The positive difference in premiums between strategic and financial acquirers is driven by the difference in dispersions of valuations (e.g., strategic bidders’ synergies are more dispersed) and the set of auction participants. The difference in average valuations is relatively unimportant. My approach can help explain outcomes of asset sales, even in settings with limited bidder data.