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The Impact of Deal Frequency and Acquisition Blocks on Bidder Performance

Saccuman, Andrea LU and Schraa, Jorik LU (2024) BUSN79 20241
Department of Business Administration
Abstract
This study investigates the performance of serial acquirers, with a particular focus on how differences in acquisition strategies influence announcement returns. It integrates Morillon's (2021) bidder classification: loners, occasional, joggers, sprinters, and marathoners. We analysed the frequency of deals and whether these deals are clustered in blocks. The sample is unique as it focuses on the European market rather than the US market. It includes 928 acquirers which in total undertook 3,961 acquisitions in twelve countries and forty-one industries across 20 years, from 2000 to 2019. We conducted an event study that measured performance through cumulative abnormal returns. Contrary to US studies by Morillon (2021) and Macias et al.... (More)
This study investigates the performance of serial acquirers, with a particular focus on how differences in acquisition strategies influence announcement returns. It integrates Morillon's (2021) bidder classification: loners, occasional, joggers, sprinters, and marathoners. We analysed the frequency of deals and whether these deals are clustered in blocks. The sample is unique as it focuses on the European market rather than the US market. It includes 928 acquirers which in total undertook 3,961 acquisitions in twelve countries and forty-one industries across 20 years, from 2000 to 2019. We conducted an event study that measured performance through cumulative abnormal returns. Contrary to US studies by Morillon (2021) and Macias et al. (2023), our findings indicate that the most frequent and continuous bidders in Europe are not immune to declining announcement returns. We also found that acquirers which do three or more deals quickly after each other are likely to face declining results. This is not the case for more selective acquirer which undertake two acquisitions in a block. Further, we examined the influence of growth, overvaluation, payment method, and cash position on deal performance. Our findings contribute to the literature on M&A by distinguishing types of bidders instead of investigating the performance of serial acquirers in general. Additionally, it investigates factors such as acquisitiveness and bidder characteristics. For practice, it offers insights, highlighting the importance of careful planning and resource allocation. (Less)
Please use this url to cite or link to this publication:
author
Saccuman, Andrea LU and Schraa, Jorik LU
supervisor
organization
alternative title
An Analysis of European Deals
course
BUSN79 20241
year
type
H1 - Master's Degree (One Year)
subject
keywords
Acquisition Blocks, Bidder Classification, Bidder Returns, Deal Frequency, Serial Acquirers
language
English
id
9155362
date added to LUP
2024-06-23 00:13:17
date last changed
2024-06-23 00:13:17
@misc{9155362,
  abstract     = {{This study investigates the performance of serial acquirers, with a particular focus on how differences in acquisition strategies influence announcement returns. It integrates Morillon's (2021) bidder classification: loners, occasional, joggers, sprinters, and marathoners. We analysed the frequency of deals and whether these deals are clustered in blocks. The sample is unique as it focuses on the European market rather than the US market. It includes 928 acquirers which in total undertook 3,961 acquisitions in twelve countries and forty-one industries across 20 years, from 2000 to 2019. We conducted an event study that measured performance through cumulative abnormal returns. Contrary to US studies by Morillon (2021) and Macias et al. (2023), our findings indicate that the most frequent and continuous bidders in Europe are not immune to declining announcement returns. We also found that acquirers which do three or more deals quickly after each other are likely to face declining results. This is not the case for more selective acquirer which undertake two acquisitions in a block. Further, we examined the influence of growth, overvaluation, payment method, and cash position on deal performance. Our findings contribute to the literature on M&A by distinguishing types of bidders instead of investigating the performance of serial acquirers in general. Additionally, it investigates factors such as acquisitiveness and bidder characteristics. For practice, it offers insights, highlighting the importance of careful planning and resource allocation.}},
  author       = {{Saccuman, Andrea and Schraa, Jorik}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{The Impact of Deal Frequency and Acquisition Blocks on Bidder Performance}},
  year         = {{2024}},
}