Acquisition Premium, Leverage Change and Post-Acquisition Performance
(2012) BUSN89 20121Department of Business Administration
- Abstract
- This paper focused on the relation between acquisition premium, acquirer leverage change and the post-acquisition performance. The purpose is to empirically examine the mediating role of acquirer leverage change between acquisition premiums and post-acquisition performance.
A four-step mediation framework was employed, as proposed in Krishnan et al. (2007), combined with the controlling for other eight explanations.
This study is built upon prior research on acquisition premium and the mixed effect of leverage increase over operating performance. The interaction between premium and leverage change are explored, with a focus on their influence over post-acquisition performance.
A sample of 109 European acquisitions completed in the... (More) - This paper focused on the relation between acquisition premium, acquirer leverage change and the post-acquisition performance. The purpose is to empirically examine the mediating role of acquirer leverage change between acquisition premiums and post-acquisition performance.
A four-step mediation framework was employed, as proposed in Krishnan et al. (2007), combined with the controlling for other eight explanations.
This study is built upon prior research on acquisition premium and the mixed effect of leverage increase over operating performance. The interaction between premium and leverage change are explored, with a focus on their influence over post-acquisition performance.
A sample of 109 European acquisitions completed in the period of 1997-2009 has been studied empirically. The data was collected from the Zephyr and Reuters DataStream databases
Results show negative relation between premiums and performance, as well as a negative impact of premium paid over acquirer leverage increase. Additionally, the increase of acquirer leverage as a result of the acquisition will enhance the post-acquisition performance under abnormal return model. But the acquirer leverage change does not mediate the negative relationship between premiums and post-acquisition performance; other deal-specific characteristics might be a better mid-path between premium-performance relations (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/2797111
- author
- Feng, Ling and Urbán, Péter
- supervisor
- organization
- alternative title
- A Study of European Acquisitions
- course
- BUSN89 20121
- year
- 2012
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Mergers and Acquisitions, Acquisition Premium, Leverage Change, Post-Acquisition Performance, Europe
- language
- English
- id
- 2797111
- date added to LUP
- 2012-06-25 09:30:34
- date last changed
- 2012-06-25 09:30:34
@misc{2797111, abstract = {{This paper focused on the relation between acquisition premium, acquirer leverage change and the post-acquisition performance. The purpose is to empirically examine the mediating role of acquirer leverage change between acquisition premiums and post-acquisition performance. A four-step mediation framework was employed, as proposed in Krishnan et al. (2007), combined with the controlling for other eight explanations. This study is built upon prior research on acquisition premium and the mixed effect of leverage increase over operating performance. The interaction between premium and leverage change are explored, with a focus on their influence over post-acquisition performance. A sample of 109 European acquisitions completed in the period of 1997-2009 has been studied empirically. The data was collected from the Zephyr and Reuters DataStream databases Results show negative relation between premiums and performance, as well as a negative impact of premium paid over acquirer leverage increase. Additionally, the increase of acquirer leverage as a result of the acquisition will enhance the post-acquisition performance under abnormal return model. But the acquirer leverage change does not mediate the negative relationship between premiums and post-acquisition performance; other deal-specific characteristics might be a better mid-path between premium-performance relations}}, author = {{Feng, Ling and Urbán, Péter}}, language = {{eng}}, note = {{Student Paper}}, title = {{Acquisition Premium, Leverage Change and Post-Acquisition Performance}}, year = {{2012}}, }