Mergers and acquisitions: A review of the literature

Abstract

This paper is a selected literature review of the theories and empirical evidence on mergers and acquisitions. Initially, the fundamental factors, and the underlying theories, causing mergers is explored. Subsequently, the empirical evidence is examined on: (1) the operating performance of the acquirers and the acquired firms before and after the merger, (2) stockholder wealth impact, (3) form of payment used to complete the acquisition, (4) conglomerate mergers, and (5) corporate governance affecting the firm's ownership and control.