earticle

영어

Using a takeover sample of U.S. public firms over 1981-2004, we examine whether takeovers help firms enhance operational performance. We find that, on average, takeovers decrease operating profitability (measured by ROA), primarily because of revenue dis-synergy. Surprisingly, contrary to conventional wisdom that cost synergy is relatively easy to achieve, the average takeover not only fails to generate cost synergy but in fact leads to general deterioration in cost performance. These observations are obtained irrespective of whether takeovers are intended for vertical integration or diversification and whether payment is in cash or stock. Interestingly, there is evidence that firms in our control sample—comprised of firms from the same industry that do not engage in takeovers—experience similar patterns of declines in operational performance in the postmerger performance period. Overall, our results suggest that the average takeover does not enhance operational performance (due to both revenue dis-synergy and cost dis-synergy) and that industry shocks may be responsible for general declines in operational performance irrespective of whether firms engage in mergers or not.