Mergers and acquisitions continue to make headlines in the United States. Stakeholders in both the acquiring and the acquired firms anticipate robust returns from these deals. Indeed, the acquired companies capture considerable stock price premiums when the transactions close. However, in this incisive analysis, S&P Global Market Intelligence associates Richard Tortoriello, Temi Oyeniyi, David Pope, Paul Fruin and Ruben Falk find that most acquiring firms tend to underperform significantly in their industries over the first three postmerger years. getAbstract recommends this highly technical, yet insightful, report to investors interested in understanding the dynamics of M&A on shareholder returns.
In this report, you will learn
- What outcomes companies involved in mergers and acquisitions are likely to experience,
- Why the postmerger stock prices of acquiring firms often underperform their industry, and
- What predeal conditions require investors’ close consideration.
About the Authors
Richard Tortoriello et al. are professionals at Quantamental Research, a unit of S&P Global Market Intelligence.