The Impact of Acquisitions on Operating Performance: Some Australian Evidence

Sharma, Divesh S.; Ho, Jonathan

doi:10.1111/1468-5957.00428

Cited by 163 publications

(253 citation statements)

References 51 publications

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“…Such results have also been supported by many other scholars, such as Manson et al (2000), Heron and Lie (2002), and Powell and Stark (2005) for domestic M&A. In contrast, Sharma and Ho (2002) and Bouwman et al (2009) showed that more than 50% of the sample companies experienced losses during the M&A year and the two years after the M&A deal.…”

Section: Operating Performance Methodologysupporting

confidence: 68%

An Analysis of Short-Term Performance of UK Cross-Border Mergers and Acquisitions by Chinese Listed Companies

Zhu

Moeller

2016

SSRN Journal

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Using a unique and proprietary database of Chinese cross-border mergers and acquisitions into the UK from 2012 to early 2016, this paper investigates the short-term performance of UK cross-border mergers and acquisitions acquired by Chinese publicly-listed companies. Using event study analysis with four different time-period windows, the results show that Chinese acquirers have earned significantly positive abnormal returns on the first day following the announcement date of M&A deals, however, these positive returns faded away over time. In addition, we conduct the event analysis by sector subsamples. The findings suggest that Chinese acquirers in Real Estate and other business sector deals have gained positive abnormal returns, while those in the Financial sector had negative abnormal returns. Regarding the factors that drive stock performance, the paper takes five of the most related deal characteristics into consideration both in univariate analysis and regression analysis. The results indicate that target form (public/private) and absolute transaction size are the most influential factors on the short-term performance of these Chinese acquiring firms: acquirers engaged in deals where the target firms are UK private and small/medium-sized earn statistically significant higher abnormal returns than those UK public and large-sized targets.

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Section: Operating Performance Methodologysupporting

confidence: 68%

An Analysis of Short-Term Performance of UK Cross-Border Mergers and Acquisitions by Chinese Listed Companies

Zhu

Moeller

2016

SSRN Journal

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“…Capron (1999), Sharma and Ho (2002) and Dutton and Jog (2009) found no effect of (market-)relatedness on the economic performance of M&As. An older study by Singh and Montgomery (1987) based on 105 US firms in the period 1975-1980 found a positive effect of market-relatedness on the profitability of M&As.…”

Section: Basic Modelmentioning

confidence: 98%

How Swiss small and medium-sized firms assess the performance impact of mergers and acquisitions

Arvanitis

Stucki

2013

Small Bus Econ

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. primarily affected by specific M&A characteristics, but not by general market characteristics such as demand development or competition conditions. Rather astonishingly, it is also not affected by firm characteristics such as capital intensity, human capital endowment and firm size. Terms of use: Documents in EconStor mayThere is an interesting exception: innovation activities. This means that with the remarkable exception of innovation activities the level of M&A performance is determined primarily by factors of the M&A process itself. There is a broad theoretical and empirical literature on the economic performance of mergers and acquisitions (M&A) (see, e.g., Agrawal and Jaffe 2000;Kaplan 2000; Martynowa and Renneboog 2008;Gugler et al. 2012). Nevertheless, some aspects remain under-researched, particularly, those that are specific to small and medium-sized firms (SMEs). This neglect of M&A studies that refer to SMEs may be traced back, firstly, to the fact that the majority of empirical studies rely on stock market-based measures of performance (see Bild 1998;King et al. 2004;McDonald et al. 2008;and Meglio and Risberg 2011). As such information is not available for the majority of SMEs, the performance of M&As is almost exclusively analyzed for large M&As and it is unclear whether the implications of these studies are valid also Our study is based on a representative sample that includes all Swiss M&As that took place in the period [2006][2007][2008]. Average size of these firms is just about 320 employees, whereupon only 40% of the firms have more than 100 employees. Accordingly, we are able to draw conclusions regarding the total of M&As in the respective period of time, 86% of which had less than 500 employees. Further, our study is based on survey data that provide us detailed information on the determinants of M&A performance. We investigate the firm characteristics that determine the innovation and economic performance of M&A. The performance measures come from surveybased firms' assessments. These measures are regressed on a series of possible determining factors as postulated in existing theoretical and empirical literature.Previous empirical studies that deal with the determinants of M&A performance are often based on small sample survey results. Probably most closely related to our work are the studies of Capron (1999) and Cassiman et al. (2005). However, both studies are not representative of the M&A population. Furthermore, we analyze ...

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“…Theoretically, there is a number of reasons why a company could increase its performance through M&A such as synergies (Larsson & Finkelstein, 1999), economies of scope and scale (Pangarkar & Lim, 2003), and greater market monopoly (Ikeda & Doi, 1983;Lubatkin, 1983;Sharma & Ho, 2002). In reality, many firms may suffer a decrease in performance from an M&A activity, as companies face several obstacles which prevent such benefits from being properly executed (Chakrabarti, 1990;Fang, Fridh, & Schultzberg, 2004;Ivancevich, Schweiger, & Power, 1987;Nahavandi & Malekzadeh, 1988;Schweiger & Denisi, 1991).…”

Section: Introductionmentioning

confidence: 99%

Long-term performance of mergers and acquisitions in ASEAN countries

Rao‐Nicholson

Salaber

Cao

2016

Research in International Business and Finance

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The study looks at mergers and acquisitions (M&As) in ASEAN countries and examines the post-M&A performance using data from 2001 to 2012. The industry-adjusted operating performance tends to decline in the 3 years following an M&A. Yet, the results suggest that M&As completed during the financial crisis are more profitable than those implemented before and/or after the crisis. We argue that this is mainly due to the synergies created between the firms' resources during the crisis which augur well for firms' economic performance. We find that, during the crisis, certain characteristics of the firms like the relative size of the target, cross-border nature of deals, acquirer's cash reserves and friendly nature of deals are important determinants of long-term post-M&A operating performance.However, for M&As during the crisis, there appears to be no relationship between performance and firms' characteristics linked to M&A activity such as payment method, industry relatedness and percentage of target's share acquired.

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The Impact of Acquisitions on Operating Performance: Some Australian Evidence

Cited by 163 publications

References 51 publications

An Analysis of Short-Term Performance of UK Cross-Border Mergers and Acquisitions by Chinese Listed Companies

An Analysis of Short-Term Performance of UK Cross-Border Mergers and Acquisitions by Chinese Listed Companies

How Swiss small and medium-sized firms assess the performance impact of mergers and acquisitions

Long-term performance of mergers and acquisitions in ASEAN countries

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