Christos P. Mavis
Selling to buy: Asset sales and acquisitions
Mavis, Christos P.; McNamee, Nathan P.; Petmezas, Dimitris; Travlos, Nickolaos G.
Authors
Nathan P. McNamee
Professor Dimitris Petmezas dimitris.petmezas@durham.ac.uk
Professor
Nickolaos G. Travlos
Abstract
This study explores the impact of joint corporate asset restructuring decisions, where firms sell an asset in order to fund a subsequent acquisition (selling-to-buy). We find that firms with asset sales are associated with increased acquisition probability. The effect is more pronounced for financially constrained firms. We also show that, in addition to the established improved firm efficiency from focus-increasing asset sales, financially constrained firms obtain the necessary funds to conduct focus-increasing acquisitions, improving further their efficiency. This translates into both higher long-run operating performance and stock abnormal returns at the asset sale announcement.
Citation
Mavis, C. P., McNamee, N. P., Petmezas, D., & Travlos, N. G. (2020). Selling to buy: Asset sales and acquisitions. Journal of Corporate Finance, 62, Article 101587. https://doi.org/10.1016/j.jcorpfin.2020.101587
Journal Article Type | Article |
---|---|
Acceptance Date | Feb 2, 2020 |
Online Publication Date | Feb 6, 2020 |
Publication Date | 2020-06 |
Deposit Date | Jul 29, 2020 |
Publicly Available Date | Aug 6, 2021 |
Journal | Journal of Corporate Finance |
Print ISSN | 0929-1199 |
Publisher | Elsevier |
Peer Reviewed | Peer Reviewed |
Volume | 62 |
Article Number | 101587 |
DOI | https://doi.org/10.1016/j.jcorpfin.2020.101587 |
Public URL | https://durham-repository.worktribe.com/output/1259545 |
Related Public URLs | https://epubs.surrey.ac.uk/853741/ |
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Publisher Licence URL
http://creativecommons.org/licenses/by-nc-nd/4.0/
Copyright Statement
© 2020 This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
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