Date of Completion
Acquisition Premiums, Post-Acquisition Performance
William Ross, Jr
Field of Study
Doctor of Philosophy
In M&As, to acquire the other companies, managers usually pay a premium. In theory, the premium is explained by the market's acknowledgment of a potential increase in value for both firms standing together and coordinating their resources. The problem is that literature usually explains acquisition premium and post-acquisition performance from a one-sided price perspective. To some extent, this one-sided perspective often captures the acquirer's willingness to pay, but it underestimates the two-sided nature of any transaction; the target's perspective is usually omitted. One side sells when they perceive that the value of their asset is lower than the price paid by the buyer. Similarly, the buyer buys when they perceive that the value of the asset exceeds the price. In this three-paper dissertation, I found consistent evidence that the two-sided approach to M&A research, which, in addition to more realistic, also better explain acquisition premium and post-acquisition performance.
Grove, Sergio, "A Bilateral Perspective of Acquisition Premiums and Post-Acquisition Performance" (2020). Doctoral Dissertations. 2440.
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