The Characteristics of Takeover Target Firms: The Case of the English Brewing Industry, 1945–1960

The paper examines if takeovers target the “correct” firms. Using the English brewing industry (1945–1960) as a case study, size and conventional performance criteria of taken-over, independent and merging firms are assessed, and shown not to be valid target indicators. Comparison of a real estate/property utilization parameter – average asset value per “tied house” – for each firm category, shows that taken-over firms have the lowest average asset value per tied house. Low average asset value per house characterizes firms which, by failing to optimize their property assets, are poor performers. Takeover therefore, in this case, targets the “correct” firms.