Why Do Firms Merge and Then Divest? A Theory of Financial Synergy
- 1 July 1999
- journal article
- Published by University of Chicago Press in The Journal of Business
- Vol. 72 (3) , 319-346
- https://doi.org/10.1086/209617
Abstract
This article develops a theory of mergers and divestitures. The motivation stems from inability to finance marginally profitable projects as stand‐alones due to...Keywords
All Related Versions
This publication has 33 references indexed in Scilit:
- A Reexamination of the Conglomerate Merger Wave in the 1960s: An Internal Capital Markets ViewThe Journal of Finance, 1999
- Optimal Financial Contracting: Debt versus Outside EquityThe Review of Financial Studies, 1998
- Asset sales and increase in focusJournal of Financial Economics, 1995
- Optimality of Spin-Offs and Allocation of DebtJournal of Financial and Quantitative Analysis, 1993
- Plant-closing decisions and the market value of the firmJournal of Financial Economics, 1990
- Managerial discretion and optimal financing policiesJournal of Financial Economics, 1990
- Do Bad Bidders Become Good Targets?Journal of Political Economy, 1990
- The Market Mechanism as an Incentive SchemeThe Bell Journal of Economics, 1983
- Risk Reduction as a Managerial Motive for Conglomerate MergersThe Bell Journal of Economics, 1981
- Agency Problems and the Theory of the FirmJournal of Political Economy, 1980