Disentangling the link between stock and accounting performance in acquisitions |
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| Authors: | André Betzer Markus Doumet Marc Goergen |
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| Institution: | 1. BUW – Schumpeter School of Business and Economics, Gau?str. 20, 42119 Wuppertal, Germanybetzer@wiwi.uni-wuppertal.deandre.betzer@uni-bonn.de;4. Finance Area, University of Mannheim, L9 1-2, 68161 Mannheim, Germany;5. Cardiff Business School, Cardiff University, Aberconway Building, Colum Drive, Cardiff, CF10 3EU, UK |
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| Abstract: | We study the accounting and stock performance of 4547 US acquisitions during 1989 and 2008. We categorise acquisitions into four types based on the four possible combinations of positive or negative abnormal stock performance and abnormal accounting performance. First, we compare the bidder, bid and target characteristics across the four types of acquisitions. We find significant differences. Second, with the help of existing theories we explain these differences in bidder, bid and target characteristics by differences in the acquisition motives. |
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| Keywords: | mergers and acquisitions performance measurement synergies preemption overvaluation corporate governance agency problems |
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