R.H. Smith School of Business
University of Maryland
Room 4417, Van Munching Hall
College Park, MD 20742
Information about this author at RePEc
NBER Working Papers and Publications
|August 2008||Post-Merger Restructuring and the Boundaries of the Firm|
with Gordon Phillips, N. R. Prabhala: w14291
Mergers and acquisitions are a fast way for a firm to grow. Using plant-level data, we examine how firms redraw their boundaries after acquisitions. We find that there is a large amount of restructuring in a short period following mergers. Acquirers sell 27% and close 19% of acquired plants within three years of the acquisition. Plants in the target's peripheral divisions, especially in industries in which asset values are increasing, and in industries in which the acquirer does not have a comparative advantage, are more likely to be sold by the acquirer. Acquirers with skill in running their peripheral divisions tend to retain more acquired plants. Plants retained by acquirers increase in productivity whereas sold plants do not. The extent of post-merger restructuring activities and their...
Published: Maksimovic, Vojislav & Phillips, Gordon & Prabhala, N.R., 2011. "Post-merger restructuring and the boundaries of the firm," Journal of Financial Economics, Elsevier, vol. 102(2), pages 317-343. citation courtesy of
|June 2006||The Industry Life Cycle and Acquisitions and Investment: Does Firm Organization Matter?|
with Gordon Phillips: w12297
We examine the effect of financial dependence on acquisition and investment within existing industries by single-segment and conglomerate firms for industries undergoing different long run changes in industry conditions. Conglomerates and single-segment firms differ more in rates of within-industry acquisitions than in capital expenditure rates, which are similar across organizational type. In particular, 36 percent of within-industry growth by conglomerate firms in growth industries is from intra-industry acquisitions, compared to nine percent for single segment firms. Financial dependence, a deficit in a segment%u2019s internal financing, decreases the likelihood of within-industry acquisitions and opening new plants, especially for single-segment firms. These effects are mitigated for c...
Published: Maksimovic, Vojislav and Gordon Phillips. “The Industry Life-Cycle, Acquisitions and Investment: Does Firm Organization Matter?” Journal of Finance 63 (April 2008): 629-64.