| Tekijä: | Fridolfsson, S.-O. Stennek, J. |
| Otsikko: | Why mergers reduce profits and raise share prices - a theory of preemptive mergers |
| Lehti: | Journal of the European Economic Association
2005 : SEP, VOL. 3:5, p. 1083-1104 |
| Asiasana: | mergers profit share prices |
| Kieli: | eng |
| Tiivistelmä: | This paper discusses why mergers often reduce profits, but raise share prices. If being an "insider" is better than being an "outsider", firms may merge to pre-empt their partner merging with a rival. The insiders' stock market value is increased, since the risk of becoming an outsider is eliminated. These results are derived in an endogenous-merger model, predicting the conditions under which mergers occur, when they occur, and how the surplus is shared. |
SCIMA