publication . Report . Preprint . 2013

Financial vs. Strategic Buyers

Marc Martos-Vila; Matthew Rhodes-Kropf; Jarrad Harford;
Open Access
  • Published: 01 Aug 2013
  • Publisher: National Bureau of Economic Research
Abstract
This paper introduces the impact of debt misvaluation on merger and acquisition activity. Debt misvaluation helps explain the shifting dominance of financial acquirers (private equity firms) relative to strategic acquirers (operating companies). The effects of overvalued debt might seem limited since both acquirer types and target firms can access the debt markets. However, fundamental differences in governance and project co-insurance between the two types of acquirer interact with debt misvaluation, resulting in variation in how assets are owned that depends on debt market conditions. We find support for our theory in merger data using a novel measure of debt ...
Subjects
free text keywords: jel:G24, jel:G34
Powered by OpenAIRE Open Research Graph
Any information missing or wrong?Report an Issue
publication . Report . Preprint . 2013

Financial vs. Strategic Buyers

Marc Martos-Vila; Matthew Rhodes-Kropf; Jarrad Harford;