The sources of value creation in acquisitions of intangible assets

B-Tier
Journal: Journal of Banking & Finance
Year: 2023
Volume: 154
Issue: C

Authors (3)

Masulis, Ronald W. (UNSW Sydney) Reza, Syed Walid (not in RePEc) Guo, Rong (not in RePEc)

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We document that acquirer announcement returns and post-M&A performance rise with a target's proportion of intangible assets. This shareholder wealth creation is associated with profitable acquirers purchasing complementary intangible assets and promising growth options from less profitable targets. Purchase prices are lower when targets face financial constraints limiting their ability to pursue promising investment opportunities. Analyzing acquisitions across different classes of intangible assets and matching successful with failed bids for targets with intangible assets support our main findings and suggest that these results are robust to endogeneity concerns. We conclude that target intangible assets provide important sources of M&A value creation.

Technical Details

RePEc Handle
repec:eee:jbfina:v:154:y:2023:i:c:s0378426623001036
Journal Field
Finance
Author Count
3
Added to Database
2026-01-25