THE MEDIUM OF EXCHANGE IN MERGERS AND ACQUISITIONS

This study examines the role of the medium of exchange in the explanation of returns and the distribution of wealth between parties in mergers and acquisitions. The wealth changes of shareholders of acquiring and acquired firms is examined for 272 mergers consummated between 1980 and 1986. We find that the distribution of the wealth gains does not differ among mergers using different mediums of exchange and that the relative size of the two parties is the primary determinant of the distribution of wealth changes. © 1991.