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Large Wealth Creation in Mergers and Acquisitions
Journal article   Peer reviewed

Large Wealth Creation in Mergers and Acquisitions

Eliezer Fich, Tu Nguyen and Micah Officer
Financial management, v 47(4), pp 953-991
01 Dec 2018

Abstract

Acquisition Acquisitions & mergers Chief executive officers Financial management Mergers Shareholders Valuation Wealth
We examine completed mergers and acquisitions (M&A) deals with large acquirer shareholder dollar wealth gains at announcement. We find that large‐gain acquisitions are: 1) typically “bolt‐on” deals that are small relative to the acquirer's size, 2) transaction‐specific events (not firm‐ or chief executive officer (CEO)‐specific events), 3) enhanced by synergies of the merged firm, and 4) 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.

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15 citations in Scopus

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Collaboration types
Domestic collaboration
International collaboration
Web of Science research areas
Business, Finance
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