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How Do Takeovers Create Synergies? Evidence From France

Author

Listed:
  • HAMZA Taher

    (IHEC, University of Carthage, VALLOREM Lab, Université d’Orléans, France)

  • SGHAIER Adnène

    (ISG, University of Sousse, Tunisia)

  • THRAYA Mohamed Firas

    (Poitiers School of Management, France)

Abstract
Based on bidder-target asymmetry, our study investigates the source of synergy gains derived from corporate takeovers and their specific contribution to bidder value creation. Prior researches have focused on the relevance of only one source of potential synergy. We find that French takeovers tend to create long-term operating and financial synergies. These two synergy components are positive and significant with a large contribution of the former. Furthermore, cutbacks in investment expenditures represent the most significant source of operating synergies, while post-acquisition market power is non-significant. Moreover, both total and operating synergies are higher in focused takeovers initiated by “value” as opposed to "glamour" bidders. Lastly, financial synergies are likely to arise from bidder leverage level and target relative size.

Suggested Citation

  • HAMZA Taher & SGHAIER Adnène & THRAYA Mohamed Firas, 2016. "How Do Takeovers Create Synergies? Evidence From France," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 11(1), pages 54-72, April.
    • Handle: RePEc:blg:journl:v:11:y:2016:i:1:p:54-72
    as

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    References listed on IDEAS

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