The Impact of Acquisitions on Firm Performance Evidence from Private & Closely Held Companies

C. Gioia (Denmark)


Mergers; acquisitions; takeovers; productivity; ownership change


The purpose of this paper is to investigate the effects of ownership change on the performance of small and medium size, private and closely held companies. The research is conducted on a single European country, Denmark, in the period from 1991 to 1999. We test the matching theory of ownership change proposed by [1] and find empirical support for the hypothesis that changes in ownership via acquisition can be a mechanism to correct for lapses in efficiency. Acquisition targets are characterized by a low level of factor productivity at the time prior to acquisition compared to non-acquired companies. Acquired firms benefit from the change of ownership and improve their productivity and financial performance in the post acquisition period.

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