Market returns to acquirers of substantial assets

Da Silva Rosa, R; Nguyen, T; Walter, TS

Market returns to acquirers of substantial assets

Da Silva Rosa, R Nguyen, T Walter, TS

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Publisher:: Australian Graduate School of Management
Publication Type:: Journal Article
Citation:: Australian Journal of Management, 2004, 29 (Special), pp. 111 - 134
Issue Date:: 2004-01

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Field	Value	Language
dc.contributor.author	Da Silva Rosa, R	en_US
dc.contributor.author	Nguyen, T	en_US
dc.contributor.author	Walter, TS	en_US
dc.date.issued	2004-01	en_US
dc.identifier.citation	Australian Journal of Management, 2004, 29 (Special), pp. 111 - 134	en_US
dc.identifier.issn	0312-8962	en_US
dc.identifier.uri	http://hdl.handle.net/10453/12899
dc.description.abstract	Does poor post-acquisition performance characterise firms that make non-M&A acquisitions? We investigate the wealth effects of substantial asset acquisitions (i.e. acquisitions that cost over $10 million) on acquiring firms' shareholders. We find significant abnormal positive market reaction to asset acquisition announcements and, contrary to findings for firms undertaking M&As, the acquiring firms perform exceptionally well post-acquisition. Our findings are robust to the research method weaknesses common to many studies of long-term performance and we control for free-cash-flow as well. Our results contradict the hubris hypothesis of acquisitions and lend weight to the argument that the auction-style process that characterizes corporate takeover bids contributes to overpayment.	en_US
dc.publisher	Australian Graduate School of Management	en_US
dc.relation.ispartof	Australian Journal of Management	en_US
dc.title	Market returns to acquirers of substantial assets	en_US
dc.type	Journal Article
utslib.citation.volume	Special	en_US
utslib.citation.volume	29	en_US
utslib.for	1503 Business and Management	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
utslib.for	15 Commerce, Management, Tourism and Services	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
utslib.copyright.status	open_access
pubs.consider-herdc	false	en_US
pubs.issue	Special	en_US
pubs.volume	29	en_US

Abstract:

Does poor post-acquisition performance characterise firms that make non-M&A acquisitions? We investigate the wealth effects of substantial asset acquisitions (i.e. acquisitions that cost over $10 million) on acquiring firms' shareholders. We find significant abnormal positive market reaction to asset acquisition announcements and, contrary to findings for firms undertaking M&As, the acquiring firms perform exceptionally well post-acquisition. Our findings are robust to the research method weaknesses common to many studies of long-term performance and we control for free-cash-flow as well. Our results contradict the hubris hypothesis of acquisitions and lend weight to the argument that the auction-style process that characterizes corporate takeover bids contributes to overpayment.

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http://hdl.handle.net/10453/12899