The performance and motivation of serial acquisitions: Evidence from Australia

Hossain, M.M.; Pham, M.D.; Islam, Nahid

doi:10.1016/j.irfa.2021.101827

Access Status

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Authors

Hossain, M.M.

Pham, M.D.

Islam, Nahid

Date

2021

Type

Journal Article

Metadata

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Citation

Hossain, M.M. and Pham, M.D. and Islam, N. 2021. The performance and motivation of serial acquisitions: Evidence from Australia. International Review of Financial Analysis. 77: Article No. 101827.

Source Title

International Review of Financial Analysis

DOI

10.1016/j.irfa.2021.101827

ISSN

1057-5219

Faculty

Faculty of Business and Law

School

School of Accounting, Economics and Finance

URI

http://hdl.handle.net/20.500.11937/88085

Collection

Curtin Research Publications

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.