Causes of Partial Acquisition
Post by MSF Chula at Tuesday, 8 August 2017 10:35 AM

This study explores the causes of partial acquisition of U.S. and U.K. bidders for public, private and subsidiary targets in the 1990-2010 periods. This research controls for much of the information about bidder characteristics as well as deal characteristics contained in the decision of partial acquisitions. The results show that almost of the deal characteristics are significant correlated with partial acquisitions. Firms are more likely to undertake partial acquisition when they recognize the risk of the targets and lacking of targets’ information. However there are the tradeoffs between a high degree of information asymmetry and the premiums given by the acquiring illiquid asset as well as the particular deal characteristics. Such as in case of acquiring new expertise or specialized technology from the hi-tech targets, bidders have to take the private benefits of control and show their investors for their confidence in the investment. Thus, partial acquisitions are not the answer. So, the disclosure of this paper will reveal the bidders’ view and contribute the investor a new motive for the existence of partial acquisition, complementary to those already existing in the literature.

Last updated at Tuesday, 8 August 2017 10:35 AM