The performance and motivation of serial acquisitions: Evidence from Australia

Mosharraf Hossain; Man Duy Pham; Nahid Islam

doi:10.1016/j.irfa.2021.101827

The performance and motivation of serial acquisitions: Evidence from Australia

Mosharraf Hossain, Man Duy Pham, Nahid Islam

Accounting and Finance

Research output: Contribution to journal › Article › peer-review

5 Citations (Scopus)

Abstract

Using 2696 acquisition announcements reported in Australia between 2000 and 2016, we document lower stock returns but higher risk for deals made by serial acquirers compared to those made by single acquirers after controlling for firm and deal characteristics. We also find that serial acquirers' underperformance relative to single acquirers is more pronounced when managers gain more control over their firm's resources. Further analysis reveals that the outcome of the first transactions is key to deriving serial acquisitions' motivation and performance.

Original language	English
Article number	101827
Journal	International Review of Financial Analysis
Volume	77
Early online date	24 Jun 2021
DOIs	https://doi.org/10.1016/j.irfa.2021.101827
Publication status	Published - Oct 2021

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10.1016/j.irfa.2021.101827

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title = "The performance and motivation of serial acquisitions: Evidence from Australia",

abstract = "Using 2696 acquisition announcements reported in Australia between 2000 and 2016, we document lower stock returns but higher risk for deals made by serial acquirers compared to those made by single acquirers after controlling for firm and deal characteristics. We also find that serial acquirers' underperformance relative to single acquirers is more pronounced when managers gain more control over their firm's resources. Further analysis reveals that the outcome of the first transactions is key to deriving serial acquisitions' motivation and performance.",

keywords = "Mergers and acquisitions, Overconfidence, Serial acquirers, Overinvestment, Australia",

author = "Mosharraf Hossain and Pham, {Man Duy} and Nahid Islam",

year = "2021",

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AU - Pham, Man Duy

AU - Islam, Nahid

PY - 2021/10

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N2 - Using 2696 acquisition announcements reported in Australia between 2000 and 2016, we document lower stock returns but higher risk for deals made by serial acquirers compared to those made by single acquirers after controlling for firm and deal characteristics. We also find that serial acquirers' underperformance relative to single acquirers is more pronounced when managers gain more control over their firm's resources. Further analysis reveals that the outcome of the first transactions is key to deriving serial acquisitions' motivation and performance.

AB - Using 2696 acquisition announcements reported in Australia between 2000 and 2016, we document lower stock returns but higher risk for deals made by serial acquirers compared to those made by single acquirers after controlling for firm and deal characteristics. We also find that serial acquirers' underperformance relative to single acquirers is more pronounced when managers gain more control over their firm's resources. Further analysis reveals that the outcome of the first transactions is key to deriving serial acquisitions' motivation and performance.

KW - Mergers and acquisitions

KW - Overconfidence

KW - Serial acquirers

KW - Overinvestment

KW - Australia

U2 - 10.1016/j.irfa.2021.101827

DO - 10.1016/j.irfa.2021.101827

M3 - Article

SN - 1057-5219

VL - 77

JO - International Review of Financial Analysis

JF - International Review of Financial Analysis

M1 - 101827

ER -

The performance and motivation of serial acquisitions: Evidence from Australia

Abstract

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