Performance of acquirers of divested assets: Evidence from the U.S. software industry

Item Type Journal paper
Abstract

We provide a comparative analysis of acquirer returns in acquisitions of public firms, private firms, and divested assets. On the basis of a sample of 5,079 acquisitions by U.S. software industry companies during 1988–2008, we find that acquisitions of divested assets outperform acquisitions of privately held firms, which in turn outperform acquisitions of publicly held firms. While the higher returns for acquisitions of divested assets relative to stand-alone acquisition targets can be explained by market efficiency arguments, seller distress and improved asset fit further enhance the positive returns of acquirers of divested assets consistent with the relative bargaining power explanation. Finally, we find that the effects of these buyer bargaining advantages are mutually strengthening and that they also hold for longer-term acquirer Performance.

Authors Laamanen, Tomi; Brauer, Matthias & Junna, Olli
Journal or Publication Title Strategic Management Journal
Language English
Subjects business studies
social sciences
HSG Classification contribution to scientific community
Refereed Yes
Date 1 June 2014
Publisher Wiley
Volume 35
Number 6
Page Range 914-925
Number of Pages 12
ISSN 0143-2095
Publisher DOI 10.1002/smj.2120
Depositing User Prof. Dr. Tomi Laamanen
Date Deposited 27 Feb 2018 15:03
Last Modified 03 Sep 2019 14:44
URI: https://www.alexandria.unisg.ch/publications/253774

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Citation

Laamanen, Tomi; Brauer, Matthias & Junna, Olli (2014) Performance of acquirers of divested assets: Evidence from the U.S. software industry. Strategic Management Journal, 35 (6). 914-925. ISSN 0143-2095

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https://www.alexandria.unisg.ch/id/eprint/253774
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