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This exploratory study examined the effect of corporate acquisitions on shareholder wealth by reviewing the current literature and then analyzing a selected group of recent takeovers. In order to determine whether or not any effect did in fact exist, six "acquiring " corporations were compared with similar "non-acquirors"from the same industries on a number offinancial indicators readily available to the average investor Analyses of these data indicated that, contrary to what would be expectedfrom classical economic theory, the acquisitions studied had essentially negative impacts on shareholder wealth. These results lead to discussion of alternative rationales for initiating merger activities and possible long term effects of the recent merger trend.

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