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The Value of Intangible Capital and its Components in Mergers

Date

2018-09-27

Journal Title

Journal ISSN

Volume Title

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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

Advisor

Part Of

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DOI

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