Citation:
Malcolm Arnold and David Parker, Stock Market Perceptions of the Motives
for Mergers in Cases Reviewed by the UK
Competition Authorities: An Empirical
Analysis, Managerial and Decision Economics,
2009, Volume 30, Number 4, Pages 211-233
Abstract:
A number of studies have considered the motivation of managers to follow a
merger strategy. However, as far as we are aware none has looked at the
influence of competition regulation on merger motives using stock market data
and event study techniques. Data drawn from 63 merger cases in the UK between
1989 and 2003 are examined for the stock market's perceptions of what motivated
managers to pursue their initial merger bid. The findings suggest that the
Synergy and Hubris dominate as motivations for mergers and that,
unintentionally, competition policy may help to reduce the number of mergers
motivated by Managerialism.
