Corpus ID: 168727457

Selling to buy : asset sales and mergers and acquisitions.

@inproceedings{McNamee2017SellingTB,
  title={Selling to buy : asset sales and mergers and acquisitions.},
  author={Nathan P. McNamee},
  year={2017}
}
This thesis studies the effects of using proceeds from asset sales as a source of funding for mergers and acquisitions (M&As). The first empirical chapter investigates the financing decisions made by acquiring firms and seeks to test a new theoretical framework proposed by Edmans and Mann (2017) which models a firm’s funding choice between asset sales and equity offerings. Their theory identifies settings in which a firm may prefer to select one financing source over the other, which may… Expand

References

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In this paper I develop a dynamic structural model in which a firm makes rational decisions to buy or sell assets in the presence of both idiosyncratic and aggregate productivity shocks. ByExpand
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We analyze the market for firms, divisions, and plants of manufacturing firms using a large sample of plant-level data for the period 1974-92. There is an active market for corporate assets, withExpand
Equity and Cash in Intercorporate Asset Sales: Theory and Evidence
We develop a two-sided asymmetric information model of asset sales that incorporates the key differences from mergers and allows the information held by each party to be impounded in the transaction.Expand
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We examine the intersection between corporate divestitures of tangible assets and investment in intangible capital (R&D) to provide new tests for the impact financing constraints have on realExpand
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In the context of large acquisitions, we provide evidence on whether firms have target capital structures. We examine how deviations from these targets affect how bidders choose to financeExpand
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Most empirical models of investment rely on the assumption that firms are able to respond to prices set in centralized securities markets (through the "cost of capital" or "q"). An alternativeExpand
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Abstract Examining stockholder and bondholder wealth of acquirers and sellers, we find that asset sales are firm value enhancing for the seller but value neutral for the acquirer. AlthoughExpand
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We argue that management sells assets when doing so provides the cheapest funds to pursue its objectives rather than for operating efficiency reasons alone. This hypothesis suggests that (1) firmsExpand
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While the means of payment in takeovers has been a focal point in the takeover literature, what has largely been ignored is the analysis of how the takeover bid is financed and what its impact is onExpand
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