What Drives Private and Public Merger Waves in Europe?

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What drives merger waves? Harford 2005 argues that mergers are an efficient response to
economic shocks to an industry, whereas Rhodes-Kropf, Robinson & Viswanathan 2005
argues that merger waves are driven by overvaluation of the acquiring firm, and to a lesser
extent, the target firm. Both papers are based on empirical analyses of listed US firms. This
paper presents additional evidence of merger waves in the European Union (EU). The use of
European data allows a more detailed analysis, since firm level data is available for both listed
as well as private transactions. This analysis reveals significant differences between driving
forces for listed firms and for private firms. Public or listed firm mergers and acquisitions are
primarily driven by overvaluation or behavioural factors, whereas private transactions are
driven by economic factors.
Original languageEnglish
Publication year2008
Publication statusPublished - 2008
Event2008 FMA Annual Meeting - Dallas, United States
Duration: 8 Oct 200811 Oct 2008

Conference

Conference2008 FMA Annual Meeting
CountryUnited States
CityDallas
Period08/10/200811/10/2008

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