Empirical Evidence on the Value Effects Of Takeovers
Create Operating or Financial Synergy
Take over poorly managed firms and change management
Choosing a Target firm and valuing control/synergy
In Practice 26.1: A Status Quo Valuation of Digital
In Practice 26.3: Value of Control
The Post-Deal Performance of Merged Companies
Analyzing Management and Leveraged Buyouts
In Practice 26.7: Valuing A Leveraged Buyout: Congoleum Inc.
Aswath Damodaran
Valuing Acquisitions
Keywords :Fundamental analysis
When analyzing investment decisions, we did not consider in any detail the largest investment decisions that most firms make, i.e., their acquisitions of other firms. Boeing’s largest investment of the last decade was not a new commercial aircraft but its acquisition of McDonnell Douglas in 1996. At the time of the acquisition, Boeing's managers were optimistic about the merger, claiming that it would create substantial value for the stockholders of both firms. What are the principles that govern acquisitions? Should they be judged differently from other investments?
By Prof. Aswath Damodaran
