Evidence from corporate mergers: leverage, industry characteristics and returns’ moments

This paper empirically examines whether merged firms increase their financial leverage, possibly reducing the gap between actual and target leverage ratios, whether merging firms with higher growth opportunities have lower leverage ratios, and in which way the behaviour of acquirers belonging to various industries differ. Moreover, we study how the distributional characteristics of returns (mean, volatility, skewness, correlation) affect the deals, and whether there is any particular connection between means of payment and risk reduction in mergers.