THE LONG-TERM PERFORMANCE OF HORIZONTAL ACQUISTIONS

摘要

This paper examines how value is created in horizontal mergers and acquistions. More specifically, it examines the impact of post-acquistion asset divestitiure and resource redeployment on the long-term performance of horizontal acquisitions. The data come from a detailed survey of acquiring firm managers and cover 253 horizontal mergers and acquisitions that were initated by European and U.S. firms in manufacturing industries for the period 1988-1992. This study incorporates insights from the cost efficiency and resource-based theories to propose a model of the effects of asset divestiture and resource redeployment on long-term acquisition performnace. Overall, our results show that both asset divestiture and resource redeployment can contribute to acquisition performance, with, however, a signficant risk of damaging acquisition performance when the divested assets and redeployed resources are those of the target.