This paper presents a review of empirical research on the impact of acquisitions on firm performance. The evidence suggests that, in the short run, acquisitions have at best an insignificant impact on shareholder wealth. Long-run performance analysis reveals overwhelmingly negative returns, while the evidence using accounting performance measures is mixed. The review also examines the impact of bid characteristics on performance. The acquisition of hostile targets, transactions that are paid for with cash and acquisitions of larger targets are associated with superior (or at least less negative) performance, while there is mixed evidence on the benefits of related acquisitions. A number of recent studies find that acquirers with superior pre-bid performance tend to experience significant underperformance in the post-bid period.