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Do mega-mergers create value The acquisition experience and mega-deal outcomes.pdf (915.48 kB)

Do mega-mergers create value? The acquisition experience and mega-deal outcomes

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journal contribution
posted on 2023-09-21, 08:30 authored by Nan Hu, Lu LiLu Li, Hui Li, Xing Wang

Existing literature shows that mega-M&A deals valued over $500mil end up destroying the shareholder value of acquirers on a significant scale. Our paper considers mega-deal as a dependent event and examines the role of acquirer’s previous acquisition experience playing in the outcome of mega-deals. We find that mega-deals conducted by firms with a high level of acquisition experience, i.e. a firm completed at least 12 transactions before, are more likely to be completed. In addition, more experienced acquirers of mega-deals generate positive abnormal stock returns for shareholders in both short-run and long-run, with a dollar value gain of $50.6 million around deal announcement. We also find that more experienced acquirers are better at managing the post-acquisition integration process and enjoy a significant improvement in operating performance.

History

School

  • Loughborough Business School

Published in

Journal of Empirical Finance

Volume

55

Pages

119 - 142

Publisher

Elsevier

Version

  • AM (Accepted Manuscript)

Rights holder

© Elsevier

Publisher statement

This paper was accepted for publication in the journal Journal of Empirical Finance and the definitive published version is available at https://doi.org/10.1016/j.jempfin.2019.11.004

Acceptance date

2019-11-07

Publication date

2019-11-14

Copyright date

2019

ISSN

0927-5398

eISSN

1879-1727

Language

  • en

Depositor

Dr Lu Li. Deposit date: 10 September 2023

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