search query: @indexterm CONGLOMERATE COMPANIES / total: 223
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| Author: | Klein, P.G. |
| Title: | Were the acquisitive conglomerates inefficient? |
| Journal: | RAND Journal of Economics
2001 : WINTER, VOL. 32:4, p. 745-761 |
| Index terms: | CONGLOMERATE COMPANIES Valuation Statistics History |
| Language: | eng |
| Abstract: | This article challenges the conventional wisdom that the 1960s conglomerates were inefficient. Valuation results consistent with recent event-study evidence that markets typically rewarded diversifying acquisitions are offered. Using new data, industry-adjusted valuation, profitability, leverage, and investment ratios for 36 large, acquisitive conglomerates from 1966 to 1974 are computed. Evidence from acquisition histories suggests that conglomerate diversification may have added value by creating internal capital markets. |
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