Value creation in acquisitions: a re-examination of performance issues

One hundred and four tender offers between 1962 and 1979 were analyzed to develop a conceptual framework to determine the connection between economic value and diversification strategies in acquisitions, as well as to determine whether different acquisition methods are connected with varying degrees of value creation. Research results indicate that different sources of value creation are likely to develop in various types of acquisitions. Research results also indicate that value creation is dependent on the mixture of characteristics of two merging companies, not the separate characteristics of each firm. Additionally, research results indicate that differences in performance between unrelated and related diversification methods is dependent upon categorizing firms as following one method or the other.