Motivation and outcome of Malaysian take-overs: an international perspective

Abstract

This paper examines the potential motives and effects of corporate takeovers that occurred in Malaysia for period 1980-1993. Mueller s (1980) methodology which has been adopted in Australia, U.S, U.K, and five European countries are employed in order to provide evidence on Malaysian takeovers on an international perspective. The findings indicate that the Malaysian takeovers were motivated by the size, growth and profit considerations, and were supported by the desire of having a balanced leverage, thus supporting the eclectic theory of takeovers. In terms of the outcomes, the paper finds that the acquiring firms have achieved larger size at the expense of reduced profits of the acquired firms.