Merger Failures
Copyright policy )Merger Failures
This paper proposes an explanation as to why some mergers fail, based on the interaction between the pre‐ and post‐merger processes. We argue that failure may stem from informational asymmetries arising from the pre‐merger period, and problems of cooperation and coordination within recently merged firms. We show that a partner may optimally agree to merge and abstain from putting forth any post‐merger effort, counting on the other partner to make the necessary efforts. If both follow the same course of action, the merger goes ahead but fails. Our unique equilibrium allows us to make predictions on which mergers are more likely to fail.
- Leibniz Association Germany
- KU Leuven Belgium
- German Institute for Economic Research Germany
- University of Amsterdam Netherlands
- City, University of London United Kingdom
synergies, Economics, L20, HB, Integration, integration, Modell, information, Aktienkurs, asymmetric information, D74, uncertainty, Business Economics and Industrial Organization, Operations Management, M14, ddc:330, Wirtschaft, Political Economy, Mergers , synergies, Management, D82, Mergers, Synergies, Asymmetric Information, Complementarities, Volkswirtschaftslehre, model construction, mergers, Modellentwicklung, 330, Management Science, enterprise, Unternehmen, complementarities, success-failure, Erfolg, Finance and Accounting, Fusion, success, merger, stock quotation, mergers, synergies, information, uncertainty, organizational culture., model, organizational culture, Erfolg-Misserfolg, Wertpapier, securities, Unternehmenskultur, Aktionär, shareholder, jel: jel:D82, jel: jel:D74, jel: jel:M14, jel: jel:L20, jel: jel:G34, ddc: ddc:330
synergies, Economics, L20, HB, Integration, integration, Modell, information, Aktienkurs, asymmetric information, D74, uncertainty, Business Economics and Industrial Organization, Operations Management, M14, ddc:330, Wirtschaft, Political Economy, Mergers , synergies, Management, D82, Mergers, Synergies, Asymmetric Information, Complementarities, Volkswirtschaftslehre, model construction, mergers, Modellentwicklung, 330, Management Science, enterprise, Unternehmen, complementarities, success-failure, Erfolg, Finance and Accounting, Fusion, success, merger, stock quotation, mergers, synergies, information, uncertainty, organizational culture., model, organizational culture, Erfolg-Misserfolg, Wertpapier, securities, Unternehmenskultur, Aktionär, shareholder, jel: jel:D82, jel: jel:D74, jel: jel:M14, jel: jel:L20, jel: jel:G34, ddc: ddc:330
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