New Evidence and Perspectives on Mergers

Gregor Andrade
Harvard Business School – Finance Unit

Mark L. Mitchell
AQR Capital Management, LLC; CNH Partners

Erik Stafford
Harvard Business School – Finance Unit

January 2001

Harvard Business School Working Paper No. 01-070
HBS Finance Working Paper No. 01-070


As in previous decades, merger activity clusters by industry during the 1990s. One particular kind of industry shock, deregulation, becomes a dominant factor, accounting for nearly half of the merger activity since the late 1980s. In contrast to the 1980s, mergers in the 1990s are mostly stock swaps, and hostile takeovers virtually disappear. Over our 1973 to 1998 sample period, the announcement-period stock market response to mergers is positive for the combined merging parties, suggesting that mergers create value on behalf of shareholders. Consistent with that, we find evidence of improved operating performance following mergers, relative to industry peers.

New Evidence and Perspectives on Mergers

Be the first to comment

Leave a Reply

Tu dirección de correo no será publicada.


Google Analytics