The Value of Intangible Capital and its Components in Mergers
Date
2018-09-27
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
ORCID
Type
Thesis
Degree Level
Masters
Abstract
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.
Description
Keywords
Intangible capital, Market for Corporate Control, Acquisitions, Takeovers, Agency Problems, Event Study
Citation
Degree
Master of Science (M.Sc.)
Department
Finance
Program
Finance