Competition in the acquisition market and acquirers' long-run performance

Article

Shams, Syed and Gunasekarage, Abeyratna. 2019. "Competition in the acquisition market and acquirers' long-run performance." International Finance. 22, pp. 399-421. https://doi.org/10.1111/infi.12339
Article Title

Competition in the acquisition market and acquirers' long-run performance

ERA Journal ID18306
Article CategoryArticle
AuthorsShams, Syed (Author) and Gunasekarage, Abeyratna (Author)
Journal TitleInternational Finance
Journal Citation22, pp. 399-421
Number of Pages23
Year2019
Place of PublicationUnited Kingdom
ISSN1367-0271
1468-2362
Digital Object Identifier (DOI)https://doi.org/10.1111/infi.12339
Web Address (URL)https://onlinelibrary.wiley.com/doi/pdf/10.1111/infi.12339
Abstract

Using a large sample of completed acquisition deals in Australia, this study examines the influence of competition in the acquisition market on the long-run operating performance of acquirers of private target firms in comparison to that of acquirers of public target firms. We find that, in contrast to acquirers targeting private firms, those targeting public firms improve their performance in the long run through competition-induced bids. However, in a competitive takeover market, public target acquirers experience significant declines in performance when acquiring targets that are labelled high performers. Additionally, public target acquirers report improved performance when acquiring a significant ownership stake in target firms.

KeywordsCompetition, long-run
ANZSRC Field of Research 2020359999. Other commerce, management, tourism and services not elsewhere classified
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Byline AffiliationsUniversity of Southern Queensland
Monash University
Institution of OriginUniversity of Southern Queensland
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