An Empirical Analysis of the Role of the Medium of Exchange in Mergers

  • Author(s): WILLARD T. CARLETON, DAVID K. GUILKEY, ROBERT S. HARRIS, JOHN F. STEWART
  • Published: Apr 30, 2012
  • Pages: 813-826
  • DOI: 10.1111/j.1540-6261.1983.tb02503.x

ABSTRACT

In empirical studies of differences between firms which are acquired and those which are not, researchers typically divide firms into two groups—acquired and nonacquired. In this paper, we argue that cash takeovers may be sufficiently different from noncash acquisitions that failure to distinguish between them may lead to inappropriate generalizations. We provide evidence from the mid 1970s that three categories of firms can be distinguished: nonacquired, acquired in a cash takeover, and acquired in an exchange of securities.

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