Value creation in mergers and acquisitions – theoretical paradigms and past research
Mergers and acquisitions represent two of a nearly limitless variety of ways in which firms can combine resources to accomplish an objective; they are a part of the corporate and business strategy of a firm and are used strategically by firms in order to survive and to grow. In light of the importance of M&As as a primary means for business firms to achieve growth, many empirical studies have tried to determine the conditions for successful M&A transactions. Sirower stated, in 1997, that “despite a decade of research, empirically based academic literature can offer managers no clear understanding of how to maximize the probability of success in acquisition programs” (13). The same holds true today, as can be seen from the results of meta-analytical investigations on the subject of value creation in M&As. In the following, the most common theories and hypotheses for M&As will be presented, and in a second step, the results of current meta-analyses on value creation in M&A transactions will be discussed and summarized.
KeywordsEvent Window Free Cash Flow Target Firm Wealth Transfer Target Company
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