DETERMINANTS OF TENDER OFFER POSTACQUISITION FINANCIAL PERFORMANCE

The present study extends previous research efforts and examines relationships between commonly discussed strategic acquisition factors and long-term financial performance measures of acquiring firms. The factors of interest include relative size, previous acquisition experience, organizational age,...

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Bibliographic Details
Published inStrategic management journal Vol. 10; no. 4; p. 339
Main Authors Fowler, Karen L, Schmidt, Dennis R
Format Journal Article
LanguageEnglish
Published Chichester Wiley Periodicals Inc 01.07.1989
Subjects
Acquisitions & mergers
Age
Diversification
Rates of return
Strategic management
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Summary:The present study extends previous research efforts and examines relationships between commonly discussed strategic acquisition factors and long-term financial performance measures of acquiring firms. The factors of interest include relative size, previous acquisition experience, organizational age, industry commonality, contested versus uncontested acquisitions, and percentage of stock acquired. The financial performance measures include both accounting and capital market data for the 4-year period preceding acquisition activity and the 4-year period following such activity. The study presents bivariate and multivariate analyses for 42 industrial manufacturing firms that engaged in the tender offer form of acquisition. The findings indicate that, on the average, post-acquisition financial performance improved significantly for organizations that had previous acquisition experience, acquired a higher percentage of a target, or were older. Post-acquisition performance decreased significantly for acquiring firms when target firms contested an acquisition.
ISSN:0143-2095
1097-0266