Hostname: page-component-77c89778f8-m42fx Total loading time: 0 Render date: 2024-07-21T14:36:36.190Z Has data issue: false hasContentIssue false
  • English
  • Français

Financial Characteristics of Merged Firms: A Multivariate Analysis

Published online by Cambridge University Press:  19 October 2009

Donald L. Stevens
Get access Rights & Permissions [Opens in a new window]

Extract

The FTC reported 22,517 corporate acquisitions during the 1960s compared with 7200 for the period, 1940–1959. The increased employment of this method of corporate growth has generated a number of studies explaining certain segments of the merger movement. Attempts have been made to explain why firms merge, how firms merge, and how mergers have affected subsequent performance of firms. Mergers have been described as consummated to avoid bankruptcy (for the acquired firm), to capitalize upon managerial inefficiencies, to gain from valuation discrepancies, to achieve portfolio diversification, and for synergistic purposes and many other reasons.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 8 , Issue 2 , March 1973 , pp. 149 - 158
Copyright
Copyright © School of Business Administration, University of Washington 1973

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

[1]Alberts, William W., and Segall, Joel E., eds. The Corporate Merger. Chicago, Ill.: University of Chicago Press, 1966.Google Scholar
[2]Altman, Edward I. “Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy.” Journal of Finance, vol. 23 (September 1968), pp. 589–609.CrossRefGoogle Scholar
[3]CooleyWilliam, W. William, W., and Lhones, Paul R.. Multivariate Procedures for the Behavioral Behavioral Sciences. New York, N. Y.: John Wiley & Sons, Inc., 1962.Google Scholar
[4]Dellenbarger, Lynn E. Jr.Common Stock Valuation in Industrial Mergers. Gainesville, Fla.: University of Florida Press, 1966.Google Scholar
[5]Edmister, Robert O. “An Empirical Test of Financial Ratio Analysis for Small Business Failure Prediction.” Journal of Financial and Quantitative Analysis, vol. 7 (March 1972), pp. 1477–1494.CrossRefGoogle Scholar
[6]Federal Trade Commission. Economic Report on Corporate Mergers.Hearings on Antitrust and Monopoly, Committee of the Judiciary, U. S. Senate, 91st Congress, First Session, Part 8A, USGPP, 1969.Google Scholar
[7]Federal Trade Commission. Current Trends in Merger Activity. Bureau of Economics, 1969.Google Scholar
[8]Federal Trade Commission. Large Mergers in Manufacturing and Mining, 1948–1969. Statistical Report No. 5, Bureau of Economics.Google Scholar
[9]Gort, Michael. “An Economic Disturbance Theory of Mergers.” The Quarterly Journal of Economics, vol. 83 (November 1969), pp. 624–642.CrossRefGoogle Scholar
[10]Harman, Harry H.Modern Factor Analysis. Chicago, Ill.: University of Chicago Press, 1967.Google Scholar
[11]Hogarty, Thomas F. “The Profitability of Growth Through Merger.” Journal of Business, vol. 43 (June 1970), pp. 312–327.Google Scholar
[12]Lane, Sylvia. “Submarginal Credit Risk Classification.” Journal of Financial and Quantitative Analysis, vol. 7 (January 1972), pp. 1379–1386.CrossRefGoogle Scholar
[13]Levy, Haim, and Sarnat, Marshall. “Diversification, Portfolio Analysis and the Uneasy Case for Conglomerate Mergers.” Journal of Finance, vol. 25, no. 4 (September 1970) pp. 795–807.CrossRefGoogle Scholar
[14]Lewellen, Wilbur G. “A Pure Financial Rationale for the Conglomerate Merger.” Journal of Finance, vol. 26 (May 1971), pp. 521–537.CrossRefGoogle Scholar
[15]Lintner, John. “Expectations, Mergers and Equilibrium in Purely Competitive Securities Markets.” American Economic Review, vol. 61, no. 2 (May 1971), pp. 101–111.Google Scholar
[16]Manne, Henry G. “Mergers and the Market for Corporate Control.” Journal of Political Economy, vol. 78 (April 1965), pp. 110–120.CrossRefGoogle Scholar
[17]Monroe, Robert J., and Simkowitz, Michael A.. “investment Characteristics of Conglomerate Targets: A Discriminant Analysis.” Southern Journal of Business, (November 1971).Google Scholar
[18]Morrison, Donald F.Multivariate Statistical Methods: New York, N. Y.: McGraw-Hill Book Company, 1967.Google Scholar
[19]Morrison, Donald G. “on the Interpretation of Discriminant Analysis.” Journal of Marketing Research, vol. 6 (May 1969), pp. 156–163.CrossRefGoogle Scholar
[20]Pinches, George E., and Mingo, Kent A.. “A Multivariate Analysis of Industrial Bond Ratings.” Forthcoming in Journal of Finance.Google Scholar
[21]Reid, Samuel Richardson. Mergers, Managers and the Economy. New York, N. Y.: McGraw-Hill Book Company, 1968.Google Scholar
[22]Reilly, Frank K. “What Determines the Ratio of Exchange in Corporate Mergers.” Financial Analysts Journal, vol. 18 (November–December 1962), pp. 57–60.CrossRefGoogle Scholar
[23]St.Johns Law Review Association. Conglomerate Mergers and Acquisitions: opinions and Analysis. Special Edition, vol. 44 (1970).Google Scholar
[24]Sheth, Jagdish. “The Multivariate Revolution in Marketing.” Journal Of Marketing, vol. 35 (January 1971), pp. 13–24.CrossRefGoogle Scholar
[25]Sheth, Jagdish. “Using factor Analysis to Parmeters.” Journal of the American Statistical Association, vol. 64 (September 1969), pp. 808–822.CrossRefGoogle Scholar
[26]Sheth, Jagdish; and Tigert, Doudlas J.. “Factor Analysis in Marketing.” Paper read before AMA Workshop on Multivariate Methods in Marketing, January 1970 Mimeographed.Google Scholar
[27]Tatsuoka, Maurice M.Discriminant Analysis: The Study of Group Differences. Champaign, Ill.: Institute for Personality and Ability Testing, 1970.Google Scholar
[28]Tatsuoka, Maurice M.Multivariate Analysis. New York, N. Y.: John Wiley &Sons, Inc., 1971.Google Scholar