We examine what happens after each of 62 successful and unsuccessful hostile takeovers between 1984 and 1986. We find that post-takeover layoffs are relatively small in number, and can explain 10 to 20 percent of the takeover premium on average. Headquarters staff are the group most at risk of a layoff. Taxes are also a moderately important source of gains, but bidding shareholder losses and investment cuts are not. Most importantly, hostile takeovers typically result in bustups of conglomerates and allocation of divisions to other firms in the same industry as those divisions. Hostile acquirers and MBO organizers usually just broker this reallocation of assets. This finding suggests that an important part of the 1980s takeover wave is deconglomeration of American industry and appears to have been prompted by the poor performance of conglomerates and the lenient antitrust policy of the Reagan era
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