THE IMPACT OF LBOS ON INVESTMENT POLICIES AND OPERATIONS OF ACQUIRED FRENCH FIRMS

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Philippe Desbrières, Alain Schatt ORCID logo

https://doi.org/10.22495/cocv1i2p4

Abstract

This paper evaluates the extent that French LBO targets’ investment policy and operations can account for their overperformance discrepancy. Our empirical study has been carried out on 132 French LBOs between 1989 and 1994. The results show that the abnormal plunge in economic return cannot be explained by overinvestments or by inefficient working capital management. Nevertheless, abnormal increases in wages, supplies and/or sales price reductions appear to be prominent.

Keywords: Leveraged Buy-Out, Performance, Investment Policy, Operations

How to cite this paper: Desbrières, P., & Schatt, A. (2003). The impact of LBOs on investment policies and operations of acquired French firms. Corporate Ownership & Control, 1(2), 53-64. https://doi.org/10.22495/cocv1i2p4