Premium
Factors influencing wealth creation from mergers and acquisitions: A meta‐analysis
Author(s) -
Datta Deepak K.,
Pinches George E.,
Narayanan V. K.
Publication year - 1992
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.4250130106
Subject(s) - shareholder , bidding , mergers and acquisitions , business , stock (firearms) , industrial organization , finance , microeconomics , financial economics , accounting , economics , monetary economics , marketing , corporate governance , mechanical engineering , engineering
Abstract This study analyzes the empirical literature concerning the influence of various factors on shareholder wealth creation in mergers and acquisitions using a multivariate framework. Overall, results indicate that while the target firm's shareholders gain significantly from mergers and acquisitions, those of the bidding firm do not. Findings also indicate that the use of stock financing has a significant impact on the wealth of both the target and bidding firms' shareholders. The presence of multiple bidders and the type of acquisition influence the bidders' return, while regulatory changes and tender offers influence the targets' returns. The paper also provides a comparison of our findings with that of previous narrative reviews and discusses their implications from the viewpoint of managers and researchers.