Footnote:
In: Forthcoming, Management Science
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments December 28, 2016 erstellt
Description:
We evaluate the efficiency of capital deployment for acquiring firms before M&As, defined as the return on invested capital net of the cost of capital, and link this measure to firms' post-acquisition performance. Acquirers with higher, pre-acquisition net returns on investment have superior long-run operating and stock performance than do acquirers with lower returns. Acquirers with low net returns on investment also underperform matching non-acquirers. The relationship between pre-acquisition investment return and post-acquisition performance is weakened when CEO turnover occurs after deal completion. These results imply that managerial ability in deploying capital and creating value for shareholders persists through M&As