Mergers & Acquisitions

Michael A. Wiles, Neil A. Morgan, & Lopo L. Rego The Effect of Brand Acquisition and Disposal on seam Returns Brand acquisitions and presidencys are key strategic securities industrying decisions and a great deal the largest single marketing investments that ?rms make. Yet little is known closely the performance issues of such decisions. This study examines stock market reactions to brand acquisition and disposal announcements in 31 consumer industries. The results bring out that returns to such announcements depend crucially on three complementary color ?rm assetsâ€" marketing capabilities, channel relationships, and brand portfoliosâ€"but that these effects whitethorn not be symmetric across brand acquisitions and disposals. acquirer irregular returns are greater for ?rms with strong marketing capabilities and those that obtain brands with higher price/quality positioning than their existing portfolio. Investors also reward buyers that identify cost synergies in integrating impertinently brand(s) into their portfolios but punish those that identify revenue synergies. Conversely, greater abnormal returns arise for sellers with inferior channel relationships and for those selling multiple brands, brands with comparatively lower price/quality positioning than the sellers remaining portfolio, and brands unrelated to the rest of the sellers portfolio.

The results from a paired subsample provide new knowledge about the positively charged net shareholder wealth created from brand acquisitiondisposal transactions and indicate a strong role of marketing capabilities in creating this wealth. Keywords: brand porfolio, brand acquisition, brand disposal, mergers and acquisitions, event study xamining the effect of strategic marketing investments on shareholder wealth is cardinal to understanding the ?nancial impact of marketing. A ?rms shareholder nurture re?ects the discounted value of its expected future cash ?ows (e.g., Rappaport 1997). selling investments that affect channels of distribution and customers, in ways that in?uence... If you want to get a full essay, order it on our website: Ordercustompaper.com

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