The Short‐Term and Long‐Term Performance of M&amp;As

Dutta, Shantanu; Saadi, Samir; Baker, H. Kent; Kiymaz, Halil

doi:10.1002/9781118258996.ch7

Cited by 2 publications

(5 citation statements)

References 78 publications

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“…Several findings contribute theoretically to the M&A capability domain. First, we find that M&A capability is positively associated with long-term firm performance measured as return on equity (ROE) and price-to-book (PB) value, a contribution to the M&A performance conundrum literature discussed in the literature review section (Bruner, 2002; Dutta et al. , 2011; Graebner et al.…”

Section: Discussionmentioning

confidence: 97%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

“…Different measures are used to evaluate M&A performance. In finance, common measures include the abnormal return of stocks and accounting measures, such as ROE, return on assets (ROA) and return on sales (ROS) (Bauer and Matzler, 2014;Bruner, 2002;Das and Kapil, 2012;Dutta et al, 2011;King et al, 2004;Zollo and Meier, 2008). In strategy research, subjective measures gathered through management surveys and measures of strategic fit are commonly used in addition to accounting measures and event studies (Cartwright and Schoenberg, 2006;Trichterborn et al, 2016).…”

Section: Literature Review Manda Performance and Motivesmentioning

confidence: 99%

“…Synergy motives for acquisitions include a desire for operational and market synergies, obtaining market power, diversification benefits, economies of scale, the ability to use excess capacity and other cost-efficiencies (Berkovitch and Narayanan, 1993;Chatterjee, 2009;Dutta et al, 2011;Kiymaz and Baker, 2008;Rahman et al, 2011;Ranft and Lord, 2002;Swaminathan et al, 2008;Walker, 2000). Companies can also acquire bundles of resources, such as technologies, when they engage in M&A (Caiazza and Volpe, 2015;Lin and Ho, 2021;Ranft and Lord, 2002;Wernerfelt, 1984).…”

Section: Manda Motivesmentioning

confidence: 99%

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M&A capability and long-term firm performance: a strategic management perspective

Vinocur

Kiymaz

Loughry

2022

JSMA

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PurposeThis paper investigates the puzzle of mergers and acquisitions’ (M&A) long-term performance through the strategic management perspective. The authors measure the M&A capability construct and test its relationship with the long-term performance of the firms.Design/methodology/approachThe study employs a natural language processing (NLP) methodology to quantify unstructured data from 564 annual reports and 2,602 M&A synopses from January 01, 2013 to December 31, 2016. The authors combine qualitative document analysis with a quantitative method using a multiple regression analysis model.FindingsAmong serial acquirers, M&A capability positively relates to long-term firm performance measured by both return on equity and price-to-book value. The authors also find that the size of the company and the number of acquisitions influence the M&A capability, confirming previous results in the literature.Research limitations/implicationsDetailed M&A management plans are usually confidential and not fully reported. Future studies could employ enhanced artificial intelligence tools to measure the M&A capability construct beyond filing reports, encompassing interviews, social media posts, press releases and other unstructured data sources.Practical implicationsFirms can improve their M&A capability by understanding the underlying foundation of the construct provided in the research. Additionally, researchers can build on the methodology employed using advanced NLP tools to measure M&A capability.Social implicationsImproving their M&A capability would allow firms to better choose their targets and conduct a superior integration process, which could prevent distressing mergers, unnecessary negative social impacts and culture disruption. As a result, the ensuing organization would be stronger, and the long-term performance would improve.Originality/valueThis study addresses gaps in the literature on M&A performance and provides a new empirical method to measure the M&A capability.

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Section: Discussionmentioning

confidence: 97%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Review Manda Performance and Motivesmentioning

confidence: 99%

Section: Manda Motivesmentioning

confidence: 99%

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M&A capability and long-term firm performance: a strategic management perspective

Vinocur

Kiymaz

Loughry

2022

JSMA

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The Consequence of Takeover Methods: Schemes of Arrangement vs. Takeover Offers

Alqobali¹,

2022

IJFS

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This paper examined the effect of two selling processes in the UK market: takeover offers and schemes of arrangement. The latter is argued to allow a bidder to acquire a target company more cheaply and easily because schemes provide a lower threshold of the target company’s shares before “squeeze-out” procedures may be used. To address potential self-selection bias arising from bidders’ ability to choose their acquisition method, the propensity score matching methodology was applied to 803 takeovers of listed-target firms from 1995–2018. The results showed that the scheme of arrangement significantly reduces the target shareholders’ gain relative to the takeover offer.

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The Short‐Term and Long‐Term Performance of M&As

Cited by 2 publications

References 78 publications

M&A capability and long-term firm performance: a strategic management perspective

M&A capability and long-term firm performance: a strategic management perspective

The Consequence of Takeover Methods: Schemes of Arrangement vs. Takeover Offers

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