BROWSE

Related Researcher

Author's Photo

Shim, Hyeongsop
School of Business Administration
Research Interests
  • Corporate finance
  • Mergers and Acquisitions
  • Restructuring
  • Private Equity
  • Initial Public Offerings
  • Capital Structure

ITEM VIEW & DOWNLOAD

Does Financial Synergy Provide a Rationale for Conglomerate Mergers?

Cited 0 times inthomson ciCited 0 times inthomson ci
Title
Does Financial Synergy Provide a Rationale for Conglomerate Mergers?
Author
Shim, HyeongsopMooney, Tim
Issue Date
2015-08
Publisher
WILEY-BLACKWELL
Citation
ASIA-PACIFIC JOURNAL OF FINANCIAL STUDIES, v.44, no.4, pp.537 - 586
Abstract
We examine two sources of financial synergies — coinsurance effects and asset liquidity — in mergers and test whether financial synergy is greater in conglomerate mergers than horizontal mergers. We find that a reduction in cash flow volatility for consolidated firms helps enhance shareholder value. Consistent with theoretical predictions of earlier studies, our results indicate that a merger can increase shareholder value when the cash flow volatility of the consolidated firm is less than the current cash flow volatility of the acquiring firm. We present new evidence that the source of financial synergies in conglomerate mergers comes mainly from higher asset liquidity. Our test results also suggest that liquidation values are higher in conglomerate mergers than horizontal mergers holding the coinsurance effect constant, particularly when the target is financially constrained.
URI
https://scholarworks.unist.ac.kr/handle/201301/16560
URL
http://onlinelibrary.wiley.com/doi/10.1111/ajfs.12099/abstract
DOI
10.1111/ajfs.12099
ISSN
2041-9945
Appears in Collections:
SBA_Journal Papers
Files in This Item:
There are no files associated with this item.

find_unist can give you direct access to the published full text of this article. (UNISTARs only)

Show full item record

qrcode

  • mendeley

    citeulike

Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.

MENU