Abstract

This study examines the performance of related bidders over short- and long-term horizons. Acquisitions are examined between companies within the same industry from a sample of completed UK takeovers between 1994 and 1998. Performance is compared to unrelated acquisitions and also size and industry control portfolios. We also examine the effects of form of financing and the preferred method of payment by larger and smaller related bidders. It is found that related takeovers occur mainly in underperforming industries. Significant differences are found in long-horizon performance with regard to bidder size and also the method of payment.

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