NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Stock Market Driven Acquisitions

Andrei Shleifer, Robert W. Vishny

NBER Working Paper No. 8439
Issued in August 2001
NBER Program(s):   AP   CF

We present a model of mergers and acquisitions based on stock market misvaluations of the combining firms. The key ingredients of the model are the relative valuations of the merging firms, the horizons of their respective managers, and the market's perception of the synergies from the combination. The model explains who acquirers whom, whether the medium of payment is cash or stock, what are the valuation consequences of mergers, and why there are merger waves. The model is consistent with available empirical findings about characteristics and returns of merging firms, and yields new predictions as well.

download in pdf format
   (99 K)

email paper

This paper is available as PDF (99 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w8439

Published: Shleifer, Andrei & Vishny, Robert W., 2003. "Stock market driven acquisitions," Journal of Financial Economics, Elsevier, vol. 70(3), pages 295-311, December.

Users who downloaded this paper also downloaded these:
Jovanovic and Rousseau w8740 The Q-Theory of Mergers
Jovanovic and Rousseau w9279 Mergers as Reallocation
Shleifer and Vishny w5554 A Survey of Corporate Governance
Shleifer and Vishny w5167 The Limits of Arbitrage
Healy, Palepu, and Rubak w3348 Does Corporate Performance Improve After Mergers?
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us