‘Know when to fold 'em’: Policy uncertainty and acquisition abandonment

Ferguson, A; Hu, CW; Lam, P

‘Know when to fold 'em’: Policy uncertainty and acquisition abandonment

Ferguson, A

Hu, CW Lam, P

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Publisher:: Wiley
Publication Type:: Journal Article
Citation:: Accounting and Finance, 2024, 64, (2), pp. 1277-1309
Issue Date:: 2024-01-01

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Field	Value	Language
dc.contributor.author	Ferguson, A https://orcid.org/0000-0003-0535-0643
dc.contributor.author	Hu, CW
dc.contributor.author	Lam, P
dc.date.accessioned	2024-08-13T03:29:09Z
dc.date.available	2024-08-13T03:29:09Z
dc.date.issued	2024-01-01
dc.identifier.citation	Accounting and Finance, 2024, 64, (2), pp. 1277-1309
dc.identifier.issn	0810-5391
dc.identifier.issn	1467-629X
dc.identifier.uri	http://hdl.handle.net/10453/180393
dc.description.abstract	This study investigates how policy uncertainty affects the acquisition process during the post-announcement period. Utilising a sample of Australian mining project acquisitions over 1998–2017, we find that rising policy uncertainty after initial acquisition announcements is associated with delays in deal completion. In addition, prolonged high policy uncertainty plays an important role in triggering acquisition abandonment. Further, the stock market reacts less negatively to deal abandonment decisions made amid protracted policy uncertainty, and such reactions are associated with managers' explanations for terminating the deals. Overall, our findings highlight the importance of policy uncertainty as a ‘deal-breaker’ in acquisitions.
dc.language	English
dc.publisher	Wiley
dc.relation.ispartof	Accounting and Finance
dc.relation.isbasedon	10.1111/acfi.13179
dc.rights	info:eu-repo/semantics/openAccess
dc.subject	1402 Applied Economics, 1501 Accounting, Auditing and Accountability, 1502 Banking, Finance and Investment
dc.subject.classification	Accounting
dc.subject.classification	3501 Accounting, auditing and accountability
dc.subject.classification	3502 Banking, finance and investment
dc.subject.classification	3801 Applied economics
dc.title	‘Know when to fold 'em’: Policy uncertainty and acquisition abandonment
dc.type	Journal Article
utslib.citation.volume	64
utslib.for	1402 Applied Economics
utslib.for	1501 Accounting, Auditing and Accountability
utslib.for	1502 Banking, Finance and Investment
pubs.organisational-group	University of Technology Sydney
pubs.organisational-group	University of Technology Sydney/Faculty of Business
pubs.organisational-group	University of Technology Sydney/Faculty of Business/Accounting Discipline
utslib.copyright.status	open_access	*
pubs.consider-herdc	false
dc.rights.license	This work is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0). To view a copy of this license, visit https://creativecommons.org/licenses/by/4.0/
dc.date.updated	2024-08-13T03:29:06Z
pubs.issue	2
pubs.publication-status	Published
pubs.volume	64
utslib.citation.issue	2

Abstract:

This study investigates how policy uncertainty affects the acquisition process during the post-announcement period. Utilising a sample of Australian mining project acquisitions over 1998–2017, we find that rising policy uncertainty after initial acquisition announcements is associated with delays in deal completion. In addition, prolonged high policy uncertainty plays an important role in triggering acquisition abandonment. Further, the stock market reacts less negatively to deal abandonment decisions made amid protracted policy uncertainty, and such reactions are associated with managers' explanations for terminating the deals. Overall, our findings highlight the importance of policy uncertainty as a ‘deal-breaker’ in acquisitions.

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http://hdl.handle.net/10453/180393