Abstract
Language | English |
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Number of pages | 9 |
Journal | International Review of Finance |
Early online date | 20 Aug 2019 |
DOIs | |
Publication status | E-pub ahead of print - 20 Aug 2019 |
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Keywords
- synergy
- vertical aquisitions
- vertical integration
- vertical relatedness
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The importance of targets and value creation in vertical acquisitions. / Ekkayokkaya, Manapol; Paudyal, Krishna.
In: International Review of Finance, 20.08.2019.Research output: Contribution to journal › Article
TY - JOUR
T1 - The importance of targets and value creation in vertical acquisitions
AU - Ekkayokkaya, Manapol
AU - Paudyal, Krishna
PY - 2019/8/20
Y1 - 2019/8/20
N2 - We study how value creation in vertical acquisitions varies in the importance of the target’s assets to its acquirer. The synergistic gain increases in the degree of vertical relatedness between the acquirer and target industries. This finding suggests that the importance of the target firm’s assets to its acquirer’s productivity is an important value-creating channel in vertical acquisitions. We also find evidence suggesting that acquirers extract greater value as the synergistic gain increases, consistent with an efficient investment incentive underlying the integration decision.
AB - We study how value creation in vertical acquisitions varies in the importance of the target’s assets to its acquirer. The synergistic gain increases in the degree of vertical relatedness between the acquirer and target industries. This finding suggests that the importance of the target firm’s assets to its acquirer’s productivity is an important value-creating channel in vertical acquisitions. We also find evidence suggesting that acquirers extract greater value as the synergistic gain increases, consistent with an efficient investment incentive underlying the integration decision.
KW - synergy
KW - vertical aquisitions
KW - vertical integration
KW - vertical relatedness
U2 - 10.1111/irfi.12280
DO - 10.1111/irfi.12280
M3 - Article
JO - International Review of Finance
T2 - International Review of Finance
JF - International Review of Finance
SN - 1369-412X
ER -