16 Aug 2017The Winner’s Curse
When prospective acquirers evaluate an acquisition, their foremost focus is on the strategic logic of proposed combinations and on the potential social and regulatory consequences.Beyond the strategic logic, acquirers also study deeply into the valuation gains arising from a combination.
How much can an acquirer pay for an asset while still creating value for its shareholders?
What price is likely to persuade the acquisition partner to agree to a transaction?
The transaction price that is settled between the two parties depends largely on the synergies created from the combination.