Jianping Qi, Department of Finance, College of Business, University of South Florida, E-mail: email@example.com, Phone: (813) 974-9856. Ninon K. Sutton, Department of Finance, College of Business, University of South Florida, E-mail: firstname.lastname@example.org, Phone: (813) 974-6335. Qiancheng Zheng, Department of Finance, College of Business, University of South Florida, E-mail: email@example.com, Phone: (813) 974-2088.
The Value of Strategic Alliances in Acquisitions and IPOs
This article is protected by copyright. All rights reserved
We are very grateful to Raghu Rau (Editor) and an anonymous referee for insightful suggestions that greatly improved the paper. We would also like to thank participants at the SFA 2012 Annual Meeting, Daniel Bradley, Christos Pantzalis, and Delroy Hunter for valuable and helpful comments. All remaining errors are our own.
This article has been accepted for publication and undergone full peer review but has not been through the copyediting, typesetting, pagination and proofreading process which may lead to differences between this version and the Version of Record. Please cite this article as doi: 10.1111/fima.12040.
- Accepted manuscript online: 23 SEP 2013 12:15PM EST
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This paper investigates how firms’ strategic alliance experience affects their valuations as acquisition targets or in IPOs. We propose that strategic alliance experience serves as a valuable signaling device for target and IPO firms, particularly those with more intangible assets and greater opacity. The results show that takeover targets with alliance experience receive higher premiums than those without such experience. More recent alliance experience as well as alliance experience in the same industry also contributes to a larger target gain. Similarly, IPO firms that have alliance experience are shown to obtain higher valuations than those without the experience. Finally, alliance experience increases the likelihood that private firms exit by going public rather than being acquired.
This article is protected by copyright. All rights reserved.