<abstract xmlns="http://www.w3.org/1999/xhtml"><p>Based on bidder-target asymmetry, our study investigates the source of synergy gains derived from corporate takeovers and their specific contribution to bidder value creation. Prior researches have focused on the relevance of only one source of potential synergy. We find that French takeovers tend to create long-term operating and financial synergies. These two synergy components are positive and significant with a large contribution of the former. Furthermore, cutbacks in investment expenditures represent the most significant source of operating synergies, while post-acquisition market power is non-significant. Moreover, both total and operating synergies are higher in focused takeovers initiated by “value” as opposed to “glamour” bidders. Lastly, financial synergies are likely to arise from bidder leverage level and target relative size.</p></abstract>

Based on bidder-target asymmetry, our study investigates the source of synergy gains derived from corporate takeovers and their specific contribution to bidder value creation. Prior researches have focused on the relevance of only one source of potential synergy. We find that French takeovers tend to create long-term operating and financial synergies. These two synergy components are positive and significant with a large contribution of the former. Furthermore, cutbacks in investment expenditures represent the most significant source of operating synergies, while post-acquisition market power is non-significant. Moreover, both total and operating synergies are higher in focused takeovers initiated by “value” as opposed to “glamour” bidders. Lastly, financial synergies are likely to arise from bidder leverage level and target relative size.

How do Takeovers Create Synergies? Evidence from France

IHEC, University of Carthage, VALLOREM Lab, Université d’Orléans, France

Studies in Business and Economics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"How do Takeovers Create Synergies? Evidence from France"}

Based on bidder-target asymmetry, our study investigates the source of synergy gains derived from corporate takeovers and their specific contribution to bidder...

How do Takeovers Create Synergies? Evidence from France

Publié en ligne: 29 juin 2016

Pages: 54 - 72

DOI: https://doi.org/10.1515/sbe-2016-0005

Mots clés
takeovers, operating synergy, financial synergy, investment cutbacks

© 2016 Hamza Taher et al., published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

How do Takeovers Create Synergies? Evidence from France

Publié en ligne: 29 juin 2016

Pages: 54 - 72

DOI: https://doi.org/10.1515/sbe-2016-0005

Mots cléstakeovers, operating synergy, financial synergy, investment cutbacks

© 2016 Hamza Taher et al., published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Mots clés
takeovers, operating synergy, financial synergy, investment cutbacks