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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26327
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| Title: | Financial Buyers in Takeovers: Focus on Cost Efficiency |
| Authors: | Frydman, Halina
Frydman, Roman
Trimbath, Susanne |
| Keywords: | Investment Banking
Corporate Finance and Governance
Mergers
Acquisitions
Econometric Methods |
| Issue Date: | 1-Jan-2003 |
| Publisher: | Stern School of Business, New York University |
| Series/Report no.: | SOR-2003-3 |
| Abstract: | This paper examines whether financial buyers are more likely to initiate
takeovers of inefficient firms. We show that they indeed are and thus
conclude that takeovers by financial buyers play a potentially
beneficial role in the allocation of corporate assets in the U.S.
economy. Our analysis of determinants of takeovers initiated by
financial buyers uses an application of the methodology developed in
Trimbath, Frydman and Frydman (2001). In order to illustrate efficiency
enhancements introduced by financial buyers, we select Forstmann and
Little’s acquisition of General Instrument for a brief case study.
We show that their aggressive programs of cost management substantially
improved the efficiency of General Instrument. Moreover, it allowed
General Instrument to expand research and development to become the
global leader in high definition television. |
| URI: | http://hdl.handle.net/2451/26327 |
| Appears in Collections: | IOMS: Statistics Working Papers
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