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Do mega-mergers create value? The acquisition experience and mega-deal outcomes
journal contribution
posted on 2023-06-10, 02:12 authored by Nan Hu, Lu Li, Hui Li, Xing WangExisting 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
Publication status
- Published
Journal
Journal of Empirical FinanceISSN
0927-5398Publisher
ElsevierExternal DOI
Volume
55Page range
119-142Department affiliated with
- Accounting and Finance Publications
Full text available
- No
Peer reviewed?
- Yes
Legacy Posted Date
2022-01-06First Compliant Deposit (FCD) Date
2022-01-05Usage metrics
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