Political uncertainty and deal structure: Evidence from Australian mining project acquisitions

Ferguson, A; Hu, W; Lam, P

Political uncertainty and deal structure: Evidence from Australian mining project acquisitions

Ferguson, A

Hu, W Lam, P

Permalink

Publisher:: ELSEVIER
Publication Type:: Journal Article
Citation:: PACIFIC-BASIN FINANCE JOURNAL, 2022, 73, pp. 101756
Issue Date:: 2022-06-01

Closed Access

	Filename	Description	Size
	2022_Political uncertainty and deal structure_Ferguson_Hu_Lam_PBFJ.pdf	Accepted version	3.8 MB	Adobe PDF	View/Open

Copyright Clearance Process

Recently Added
In Progress
Closed Access

This item is closed access and not available.

Full metadata record

Field	Value	Language
dc.contributor.author	Ferguson, A https://orcid.org/0000-0003-0535-0643
dc.contributor.author	Hu, W
dc.contributor.author	Lam, P
dc.date.accessioned	2024-08-14T05:56:53Z
dc.date.available	2024-08-14T05:56:53Z
dc.date.issued	2022-06-01
dc.identifier.citation	PACIFIC-BASIN FINANCE JOURNAL, 2022, 73, pp. 101756
dc.identifier.issn	0927-538X
dc.identifier.uri	http://hdl.handle.net/10453/180409
dc.description.abstract	This study investigates whether acquisition deal structure matters in mitigating political uncertainty-related costs. Utilizing a large hand-collected sample of 3283 project acquisitions by Australian mining exploration entities over 1998-2017, we find that acquirers tend to structure transactions in stages in response to high political uncertainty. In addition, the stock market reacts more favourably to staged acquisitions than non-staged acquisitions when higher political uncertainty is observed. Further, we identify three potential mechanisms through which staged acquisitions help acquirers reduce the negative consequences of political uncertainty: low abandonment costs, the securing of overseas targets, and long contract duration. Overall, our findings underscore the importance of staged deal structure as an uncertainty-mitigation strategy in acquisitions.
dc.language	en
dc.publisher	ELSEVIER
dc.relation.ispartof	PACIFIC-BASIN FINANCE JOURNAL
dc.relation.isbasedon	10.1016/j.pacfin.2022.101756
dc.rights	info:eu-repo/semantics/closedAccess
dc.subject	1501 Accounting, Auditing and Accountability, 1502 Banking, Finance and Investment
dc.subject.classification	Finance
dc.subject.classification	3502 Banking, finance and investment
dc.title	Political uncertainty and deal structure: Evidence from Australian mining project acquisitions
dc.type	Journal Article
utslib.citation.volume	73
utslib.location.activity	Financial Management Association European Conference
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	closed_access	*
pubs.consider-herdc	false
dc.date.updated	2024-08-14T05:56:51Z
pubs.publication-status	Accepted
pubs.volume	73

Abstract:

This study investigates whether acquisition deal structure matters in mitigating political uncertainty-related costs. Utilizing a large hand-collected sample of 3283 project acquisitions by Australian mining exploration entities over 1998-2017, we find that acquirers tend to structure transactions in stages in response to high political uncertainty. In addition, the stock market reacts more favourably to staged acquisitions than non-staged acquisitions when higher political uncertainty is observed. Further, we identify three potential mechanisms through which staged acquisitions help acquirers reduce the negative consequences of political uncertainty: low abandonment costs, the securing of overseas targets, and long contract duration. Overall, our findings underscore the importance of staged deal structure as an uncertainty-mitigation strategy in acquisitions.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/180409