POST-MERGER PERFORMANCE AMONG HOMOGENEOUS FIRM SAMPLES |
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| Authors: | Dosoung Choi George C. Philippatos |
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| Affiliation: | The University of Tennessee, Knoxville. The authors wish to thank the participants of the "Mergers and Acquisitions" Session at the 1981 FMA Meeting in Cincinnati—particularly Donald H. Wort and Terrence Langetieg—and colleagues at various Finance Workshops for constructive comments. The editor and two unknown referees also provided significant inputs that are reflected in the present version. |
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| Abstract: | This paper analyzes the post-merger performance of acquiring firms. The sample is transformed to a few homogenized subsamples along the various critical dimensions of the merger event. Those clusters with high growth or active acquisitions, active utilization of debt capacity, and low liquidity showed performance superior to the market. The results provide support for the hypothesis of financial synergism or at least the hypothesis that aggressive growth strategies are rewarded by the market. |
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