After the ink dries. (impact of corporate mergers on stock prices)

If you thought strategy-driven mergers were good for shareholders, think again. Nearly half the deals forged in the 1990s left owners of the surviving companies' stock with below-average returns, compared with their industries, according to research by Mercer Management Consulting, Inc.

The firm analyzed 340 mergers and acquisitions worth $500 million or more, completed between 1986 and 1996. It compared stock prices three months prior to the announcement (to avoid counting the run-up in value that often precedes a deal) with the surviving company's total return (share price appreciation and cumulative dividends) three years later. Mercer found that neither the price …