Determinants of tender offer post-acquisition financial performance
Article first published online: 8 NOV 2006
Copyright © 1989 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 10, Issue 4, pages 339–350, July/August 1989
How to Cite
Fowler, K. L. and Schmidt, D. R. (1989), Determinants of tender offer post-acquisition financial performance. Strat. Mgmt. J., 10: 339–350. doi: 10.1002/smj.4250100404
- Issue published online: 8 NOV 2006
- Article first published online: 8 NOV 2006
- Manuscript Revised: 7 DEC 1988
- Manuscript Received: 10 MAR 1988
The present study extends previous research efforts and examines relationships between commonly discussed strategic acquisition factors and long-term financial performance measures of acquiring firms. The factors of interest include relative size, previous acquisition experience, organizational age, industry commonality, contested versus uncontested acquisitions, and percentage of stock acquired. The financial performance measures include both accounting and capital market data for the 4-year period preceding acquisition activity and the 4-year period following such activity. The study presents bivariate and multivariate analyses for 42 industrial manufacturing firms that engaged in the tender offer form of acquisition. The findings indicate that, on the average, post-acquisition financial performance improved significantly for organizations that had previous acquisition experience, acquired a higher percentage of a target, or were older. Post-acquisition performance decreased significantly for acquiring firms when target firms contested an acquisition.