Horizontal M&A announcements induce negative average industry peer revaluations in a large sample of public and private M&A transactions. The average peers’ revaluation is a strong predictor of future industry returns. Moreover, peers that are potentially more overvalued experience a stronger negative revaluation around horizontal deals. The revaluation of peers also depends on the public status of the target (positive when the target is public and negative when the target is private) and varies systematically with proxies for overall market misvaluation. Our findings are consistent with the idea that investors incorporate new information about industry-wide misvaluation into the valuation of non-merging firms.