Defense industry  mergers and monopoly power
Subtitle: analysis of abnormal earnings using the Edwards-Bell-Ohlson model
By: Mark J. Helsey
Contributors: Naval Postgraduate School (U.S.) 
Publisher: Naval Postgraduate School; Available from National Technical Information Service
Published: 1997
Place of publication: Monterey, Calif; Springfield, Va
Language: eng
Number of pages: 132
Description: Recent defense industry consolidation has created several large defense firms. As a result of merger activity with      their suppliers and competitors, these firms account for an increasing percentage of sales to the Department of      Defense. This thesis investigated seven large defense industry mergers, involving 12 defense firms, to assess the      effect of the mergers on the firms. Changes in a firms' anticipated abnormal earnings both premerger and      post-merger were analyzed to determine whether the defense firms exhibit monopoly power. The merger process      was divided into five stages. The Edwards- Bell-Ohlson (EBO) valuation model was used to create measures of      firms' expected abnormal earnings at each stage. Each firm's resulting abnormal rates of return on equity were      observed and analyzed between stages to track changes in assessments of expected abnormal earnings as the      merger process proceeded. Major findings indicate that post-merger abnormal rates of return increased from      premerger levels for all firms. These findings are consistent with defense firm earnings power and monopoly      position increasing due to merger activity.
Notes: "December 1997."

Thesis advisor(s): O. Douglas, WaIter E. Owen.

Thesis (M.S. in Management) Naval Postgraduate School, December 1997.

Includes bibliographical references (p. 127-130)

Approved for public release; distribution unlimited.

Also available online.

Mode of access: World Wide Web.

System requirements: Adobe Acrobat reader.

US Marine Corps (USMC) author.

dk/dk cc:9116 5/19/98.