An Anatomy of Serial Acquirers, M&A Learning, and the Role of Post-Merger Integration

47 Pages Posted: 19 Oct 2011 Last revised: 19 Dec 2012

See all articles by Dr. Jens Kengelbach

Dr. Jens Kengelbach

The Boston Consulting Group

Dominic C. Klemmer

Boston Consulting Group

Bernhard Schwetzler

HHL Leipzig Graduate School of Management - Department of Finance

Marco O. Sperling

University of Marburg - School of Business & Economics

Date Written: december 10, 2012

Abstract

Using a global sample of 26,444 M&A transactions, we empirically investigate the main drivers of serial acquirer takeover performance, focusing on the benefits of organizational learning and the detriments of post-merger integration (PMI) problems. Taking single acquirers as a control group, we find that multiple deal makers exhibit a 0.4 percentage points lower short-term abnormal return, equal to a $31M shareholder value disadvantage. While learning through experience does not depend on the quantity of acquisitions, serial acquirers can gain proficiency in some specific types of deals (specialized learning hypothesis). When looking at the PMI process, the time between two consecutive transactions and relative deal size are key success factors, suggesting that the capacity of an organization to integrate is limited. This is strong support for the indigestion hypothesis.

Keywords: Mergers & Acquisitions, Serial Acquisitions, Indigestion Hypothesis, Organizational Learning

JEL Classification: G14, G32, G34

Suggested Citation

Kengelbach, Jens and Klemmer, Dominic C. and Schwetzler, Bernhard and Sperling, Marco O., An Anatomy of Serial Acquirers, M&A Learning, and the Role of Post-Merger Integration (december 10, 2012). Available at SSRN: https://ssrn.com/abstract=1946261 or http://dx.doi.org/10.2139/ssrn.1946261

Jens Kengelbach

The Boston Consulting Group ( email )

Ludwigstrasse 21
Munich, 80539
Germany
+49(89)2317-40 (Phone)

HOME PAGE: http://www.bcg.de

Dominic C. Klemmer (Contact Author)

Boston Consulting Group ( email )

Bernhard Schwetzler

HHL Leipzig Graduate School of Management - Department of Finance ( email )

Jahnallee 59
D-04109 Leipzig
Germany
+49-341-9851-685 (Phone)
+49-341-9851-689 (Fax)

Marco O. Sperling

University of Marburg - School of Business & Economics ( email )

Am Plan 2
Marburg, D-35037
Germany

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