MERGER STRATEGIES AND SHAREHOLDER VALUE DURING TIMES OF RELAXED ANTITRUST ENFORCEMENT - THE CASE OF LARGE MERGERS DURING THE 1980S

Most of what we know about the merger strategy-shareholder value relat ionship comes from studies based on the 1948-1979 FTC Large Merger Ser ies. However, the marker for acquisitions changed dramatically in the 1980s, as government policies facilitated ''mergers for efficiency,'' rather than ''merger for diversity.'' We update the list of large merg ers through 1988, classify each with a categorical and continuous meas ure of merger ''relatedness,'' and then calculate three capital market measures of value creation. Regardless of construct definition, we fi nd no evidence that the mergers in the 1980s were more strategic or va lue creators than those from prior periods.