107
TABLE 7.1
Takeovers
Private Target Takeovers
Public Target Takeovers
Method of Payment
Stock
Cash
Mixed
Stock
Cash
Mixed
Total number of mergers
1,530
3,973
1,567
856
3,103
1,343
All combined
7,070
5,302
Total merger value
49,056.10
165,620.50
85,106.40
301,328.60
513,765.10
603,497.30
(in $ million)
Value all combined
299,783
1,418,621.00
(in $ million)
Mean acquirer market
1,032.75
1,145.97
519.49
2,109.04
4,193.93
2,594.07
value (in $ millions)
(n
=
979)
(n
=
1,525)
(n
=
804)
(n
=
644)
(n
=
623)
(n
=
347)
Mean merger size
8.14
5.88
12.42
13.22
9.06
17.62
relative to acquirer (%)
% of cross-industry
35.62
49.89
47.1
26.05
71.45
69.99
% of mergers with foreign acquirers
3.14
21.12
12.19
2.1
16.15
9.38
Mean transaction value
$32.06
$41.70
$55.12
$352.96
$165.08
$455.81
(in $ million)
Media offer price/
2.3
2.2
4
2
1.9
1.85
BV premium
(n
=
379)
(n
=
283)
(n
=
317)
(n
=
737)
(n
=
2,277)
(n
=1,042)
Mean target total
$128.66
$160.60
$95.67
$1,782.06
$961.85
$1,395.67
assets (in $ million)
(n
=
583)
(n
=
530)
(n
=
477)
(n
=
789)
(n
=
2,560)
(n
=1,174)
Mean acquirer total
$4,658.93
$5,320.04
$2,260.18
$10,645.46
$8,939.07
$6,980.96
assets (in $ million)
(n
=
509)
(n
=
499)
(n
=
417)
(n
=
654)
(n
=
633)
(n
=
349)
Mean acquirer
q
1.47
1.04
1.05
1.57
1.01
1.15
(n
=
141)
(n
=
363)
(n
=
157)
(n
=
125)
(n
=
298)
(n
=
126)
Mean two-day CAR
1.32*
1.83*
1.99*
−1.26*
0.06
0.14
for acquirers (%)
(n
=
979)
(n
=
1,525)
(n
=
804)
(n
=
644)
(n
=
623)
(n
=
347)
Different data items are provided for a sample of privately held target takeovers and a sample of publicly traded target takeov
ers, classified by the method of payment, over
the period from January 1984 to June 1996. All value-based variables are adjusted for inflation using 1995 as the base year. St
ock offers are defined as transactions made solely
in stock, whereas cash offers are transactions made solely in cash, or cash and debt. Mixed offers include offers consisting of
both cash and stock and/or convertibles. The mar-
ket values for acquiring firms are measured 11 days before the merger announcement day. The mean merger size relative to acquir
er’s market value and the total transaction
value. The percent of cross-industry mergers refers to the percentage of all mergers in that method of payment category that in
volve an acquirer and a target with different
two-digit SIC codes. Likewise, the percent of mergers with foreign acquirers provides the percentage of mergers, in a particula
r method of payment group, involving acquirers
from outside the United States. The offer price/BV premium is the total transaction value paid for the target divided by the pr
ivate target’s book value of equity. The acquirer
q
is based on the Chung and Pruitt (1994) estimation. Also, the acquirer’s two-day cumulative abnormal return (CAR) is measured o
n days 0 and 1, where day 0 is the takeover
announcement day. An asterisk (*) beside the acquirer’s CAR denotes significance at the 1 percent level. The numbers in parenth
eses reflect those cases for which a particular
data item was variable. Values shown were generated from information provided by Securities Data Company and from CRSP data.