TY  - JOUR
AU  - Auerbach,Alan J.
AU  - Reishus,David
TI  - Taxes and the Merger Decision:  An Empirical Analysis
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1855
PY  - 1986
Y2  - March 1986
UR  - http://www.nber.org/papers/w1855
L1  - http://www.nber.org/papers/w1855.pdf
N1  - Author contact info:
Alan J. Auerbach
Department of Economics
530 Evans Hall, #3880
University of California, Berkeley
Berkeley, CA 94720-3880
Tel: 510/643-0711
Fax: 510/643-0413
E-Mail: auerbach@econ.berkeley.edu

David Reishus
E-Mail: dreishus@lexecon.com
M2  - featured in NBER digest on 1986-06-01
AB  - One motive that is often cited for merger activity is the avoidance of federal income taxes by corporations and their shareholders. Yet there is little empirical evidence on the tax consequences of merger activity, or on the postmerger effects on firm policies of tax motivated mergers. In this paper, we present some initial results based on a large sample of mergers and acquisitions that occurred over the period 1968-83. We find that, in about one fifth of all mergers, there was a potential gain from the transfer of unused tax losses and credits, with an average value of approximately ten percent of the acquired company's market value. Other tax incentives to merge are also measured, but found to be less important quantitatively.
ER  -