Revealing returns: do rival firm share prices tell us anything about the competitive advantage of acquisitions?

Deskripsi

As efficient means for reallocating assets within the economy, acquisitions affect both the acquirers and their rivals. When news of a takeover hits the market, the target firm's share price usually rises sharply while the acquiring firm's share price usually falls or remains constant. Understanding returns to rivals' shares may help understand the broader impact of and motives behind acquisitions. As a consequence, there is an urgent need for research that can disentangle the reasons for rivals' share price changes. Fortunately, a recent study by Evrim Akdogu of Koc University in Istanbul does just that in a fascinating examination of the effects on acquirers and rivals of all acquisition announcements in the recent telecom merger wave. Among the many competing explanations for rivals' returns on acquisition announcement dates, this research provides evidence generally supporting the competitive advantage explanation of rivals' returns in the recent telecom merger wave..Printed journal