Aswath Damodaran 21
A Case Study: Kodak - Sterling Drugs
! Eastman Kodak’s Great Victory
Note the difference in stock price behavior of the target and bidding firms.
Note also the symmetry between premium paid over the market price at Sterling
Drugs ($ 2.1 billion) and value lost at Kodak ($2.2 billion). Kodak argued that
this merger would create synergy and that was why they were paying the
premium. The market did not seem to see any synergy.
