Most of what we know about the merger strategy-shareholder value relationship comes from studies based on the 1948-1979 FTC Large Merger Series. However, the market for acquisitions changed dramatically in the 1980s as government policies facilitated “mergers for efficiency, ” rather than “merger for diversity. ” We update the list of large mergers through 1988, classify each with a categorical and continuous measure of merger “relatedness, ” and then calculate three capital market measures of value creation. Regardless of construct de& nition, we find no evidence that the mergers in the 1980s were more strategic or value creators than those from prior periods.
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