000			01134nam a22001697a 4500
008			190322b xxu||||| |||| 00| 0 eng d
022			_a0304-405X
245			_aCash windfalls and acquisitions _cBastian von Beschwitz
260			_aAmsterdam _bElsevier _cMay 2018
300			_aPages 287-319
440			_aJournal of Financial Economics _v128 (2) _x0304-405X
500			_aAbstract This article studies the effect of cash windfalls on the acquisition policy of companies. As identification, I use a German tax reform that permitted firms to sell their equity stakes tax free. Companies that could realize a cash windfall by selling equity stakes see an increase in the probability of acquiring another company by 14%. I find that these additional acquisitions destroy firm value. Following the tax reform, affected firms experience a decrease of 1.2 percentage points in acquisition announcement returns. These effects are stronger for larger cash windfalls. My findings are consistent with the free cash flow theory.
690			_aAcquisitions
690			_aFree cash flow theory
690			_aOverinvestment
942			_2lcc _cSE
999			_c361354 _d361354