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Optimizing takeover premiums in M&A: The impact of target characteristics and strategic considerations

Publiziert in Fachliche News Mittwoch 13.02.2019
Optimizing takeover premiums in M&A: The impact of target characteristics and strategic considerations

The article by Prof. Dr. Korbinian Eichler looked into 589 takeover premiums of closed European transactions, which occurred between 2005 and 2016. It was found out that both acquirers’ strategic considerations and target firms’ financial characteristics can have a substantial impact on the level of takeover premiums. 

An acquirer’s strategic intention to gain access to new geographical markets and to accelerate the firm’s growth rate through the acquisition of a high growth firm increase his willingness for higher bids and therefore higher takeover premiums. Furthermore, the results of this empirical study suggest that low market valuations of a target firm, existing restructuring potentials like cost inefficiencies, and a high certainty to materialize synergies drive takeover premiums higher. 

Download the article.

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