Why do financial acquirers pay less than strategic acquirers? The impact of industry characteristics on the premium difference

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Volume Title
School of Business | Bachelor's thesis
Date
2017
Major/Subject
Mcode
Degree programme
Rahoitus
Language
en
Pages
28
Series
Abstract
This study provides new evidence on the role of industry characteristics in the difference of premiums paid by strategic and financial acquirers. Consistent with Bargeron, Schlingemann, Stulz and Zutter (2008), I show that financial acquirers do indeed pay smaller premium than strategic acquirers. Further, I find evidence that supports the hypothesis that financial acquirers prefer target companies in mature industries. Moreover, there is suggestive evidence that target company’s industry has a relatively high impact on the amount of premium paid by a financial acquirer.
Description
Thesis advisor
Kasanen, Eero
Keywords
acquisition, premium, financial acquirer, strategic acquirer, industry
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