Do hostile mergers destroy jobs?

This paper provides a systematic empirical analysis of the employment effects of hostile takeovers in the United Kingdom for the period 1983–1996. It finds no evidence for distinguishing between friendly and hostile acquisitions in terms of their impact on labour demand. Indeed, each type of transac...

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Bibliographic Details
Published in:	Journal of economic behavior & organization 2001-08, Vol.45 (4), p.427-440
Main Authors:	Conyon, Martin J, Girma, Sourafel, Thompson, Steve, Wright, Peter W
Format:	Article
Language:	eng
Subjects:	Acquisitions Economic behaviour Economic impact Empirical tests Employment Employment opportunities Hostile takeovers Labour demand Mergers Panel data Studies Take-overs United Kingdom
Online Access:	Get full text
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Summary:	This paper provides a systematic empirical analysis of the employment effects of hostile takeovers in the United Kingdom for the period 1983–1996. It finds no evidence for distinguishing between friendly and hostile acquisitions in terms of their impact on labour demand. Indeed, each type of transaction appears to have an immediate negative impact on labour demand, equivalent to about 7.5 percent of the pre-merger level. However, the paper does find that the absolute number of employees falls substantially, along with output, in the hostile merger case alone. This appears to be the consequence of a high level of post-merger divestment that distinguishes hostile transactions.
ISSN:	0167-2681 1879-1751