The change in information uncertainty and acquirer wealth losses

• 成果类型: Article
• 署名作者: Erickson, Merle; Wang, Shiing-Wu; Zhang, X. Frank
• 署名单位: Yale University; University of Chicago; University of Southern California
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-012-9184-9
• 发表日期: 2012
• 页码: 913-943
• 关键词: corporate diversification; ANALYSTS FORECASTS; MARKET; performance; cost; explanations; asymmetry; valuation; diversity; opinion

摘要

A large body of literature demonstrates that acquisitions are on average value destroying for the acquirer. We investigate whether the change in the acquirer's information uncertainty contributes to acquirer wealth losses. Information uncertainty affects the discount rate (the cost of capital), which in turn influences stock price. Our results indicate that acquisitions lead to increases in information uncertainty, as proxied by analysts' earnings forecast dispersion. We also find that the change in information uncertainty is negatively related to acquirer long-term stock performance, after controlling for the acquirer's fundamentals. Taken together, this evidence is consistent with the conclusion that increases in information uncertainty resulting from acquisitions contribute to acquirer post-acquisition wealth losses.