Takeovers of Technology Firms: Expectations vs. Reality

摘要: The distinctive high-growth, high-risk nature of technology-based industries raises important questions about the creation wealth in takeovers technology firms. Although acquiring firm shareholders respond favorably to high-tech takeover announcements, these acquirers generally underperform industry-matched benchmarks and size- book-to-market matched control portfolios long run. A key factor related poor post-merger performance is a low bidder ratio, especially when combined with ownership structure high potential for agency problems. These findings suggest that market tends exhibit excess enthusiasm expected benefits certain acquisitions.