When do acquirers earn abnormal returns?

In this study, we explore the conditions under which acquirers earn abnormal returns. We provide an empirical test of Barney and Chatterjee's arguments by examining the role of the respective resource contribution of the target and the acquirer. Combining an event study with a surrey of postacquisition resource transfer on a sample of 101 horizontal acquisitions, rove find that acquirers do not earn abnormal returns when they only receive resources from the target. In this case, it is likely that multiple bidders, which could have equally captured these resources, competed away all the abnormal returns front the successful bidder. In contrast, rove find that acquirers can expect to earn abnormal returns when then transfer their own resources to the target. Overcall, we find that value creation does not ensure value capture for the acquirer. Copyright (C) 2002 John Wiley Sons, Ltd.