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The performance and motivation of serial acquisitions: Evidence from Australia

Author

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  • Hossain, Md Mosharraf
  • Pham, Man Duy (Marty)
  • Islam, Nahid

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.

Suggested Citation

  • Hossain, Md Mosharraf & Pham, Man Duy (Marty) & Islam, Nahid, 2021. "The performance and motivation of serial acquisitions: Evidence from Australia," International Review of Financial Analysis, Elsevier, vol. 77(C).
    • Handle: RePEc:eee:finana:v:77:y:2021:i:c:s1057521921001617
    DOI: 10.1016/j.irfa.2021.101827
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    References listed on IDEAS

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    Cited by:

    1. Xiaoxu Zhang & Yu Song & Hongyu Liu, 2023. "Too Much of a Good Thing? The Impact of Serial M&A on Innovation Performance," Sustainability, MDPI, vol. 15(12), pages 1-23, June.
    2. Agha, Mahmoud & Hossain, Md Mosharraf, 2022. "Are board monitoring and CEO incentives substitutes for each other? Evidence from Australian market reaction to acquisition announcements," International Review of Financial Analysis, Elsevier, vol. 81(C).
    3. Feng, Yun & Liu, Chelsea & Yawson, Alfred, 2023. "Economic shocks, M&A advisors, and industry takeover activity," Pacific-Basin Finance Journal, Elsevier, vol. 82(C).

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    More about this item

    Keywords

    Mergers and acquisitions; Overconfidence; Serial acquirers; Overinvestment; Australia;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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