Faithin Omaha eBook Collection

Download or read book Large Wealth Creation in Mergers and Acquisitions written by Eliezer M. Fich and published by . This book was released on 2017 with total page 63 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine completed M&A deals with large acquirer shareholder dollar wealth gains at announcement. We find that large-gain acquisitions are (i) typically “bolt-on” deals that are small relative to the acquirer's size; (ii) transaction-specific events (not firm- nor CEO-specific events); (iii) enhanced by synergies of the merged firm; and (iv) executed by bidders with high valuation multiples. These findings provide important insight into the factors associated with considerable wealth creation for acquirer shareholders in M&A deals. The comparison between dollar returns and percentage returns in acquisitions highlights significant differences in the two methods of valuing merger outcomes. In addition, the analysis of various quantiles of merger returns sdsdthe importance of studying both the tails and the non-tails of the distribution.