The Value of Intangible Capital and its Components in Mergers
Zhan, Lexie 1993-
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In a large sample of U.S. domestic M&As over 1993-2014, we examine whether the market perceives transfer of intangible capital in mergers to be value enhancing. We find that acquirer announcement-period abnormal returns are significantly higher in acquisitions where acquirers have relatively lower intangible capital than targets. This supports the hypothesis that value is created for acquirer shareholders in the mergers involving intangible capital transfer from targets to bidders. Further, we find that the greater the target’s intangible assets relative to those of the acquirer’s, the higher the synergy created by an acquisition. This indicates that acquisitions by firms with relatively lower intangible capital generate higher total gains.
DegreeMaster of Science (M.Sc.)
CommitteeYang, Fan; Cottrell, Thomas
Copyright DateAugust 2018
Market for Corporate Control