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Acquiring Acquirers

Review of Finance, Vol. 19, pp. 1489-1541, 2015

AFA 2013 San Diego Meetings Paper

58 Pages Posted: 15 Mar 2012 Last revised: 12 Apr 2016

Ludovic Phalippou

University of Oxford - Said Business School; University of Oxford - Oxford-Man Institute of Quantitative Finance

Fangming Xu

University of Bristol

Huainan Zhao

Loughborough University - School of Business and Economics

Date Written: August 15, 2014

Abstract

Target acquisitiveness stands out as one of the primary drivers of all the key aspects of the market for corporate takeovers: acquisition announcement returns, probability of deal success, propensity to acquire and be acquired. Acquisitive targets, though a small proportion of the sample, are responsible for half of the overall negative acquisition announcement returns. Our large body of empirical evidence consistently supports the view that the motivation behind acquisitions of acquisitive targets is defensive: acquirers ‘eat in order not to be eaten’.

Keywords: Mergers and Acquisitions, Takeovers, Acquirer Announcement Returns

JEL Classification: G34, G30

Suggested Citation

Phalippou, Ludovic and Xu, Fangming and Zhao, Huainan, Acquiring Acquirers (August 15, 2014). Review of Finance, Vol. 19, pp. 1489-1541, 2015; AFA 2013 San Diego Meetings Paper. Available at SSRN: https://ssrn.com/abstract=2021979 or http://dx.doi.org/10.2139/ssrn.2021979

Ludovic Phalippou (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

University of Oxford - Oxford-Man Institute of Quantitative Finance ( email )

Eagle House
Walton Well Road
Oxford, Oxfordshire OX2 6ED
United Kingdom

Fangming Xu

University of Bristol ( email )

School of Economics, Finance and Management
8 Woodland Road
Bristol, BS8 1TN
United Kingdom
01179288841 (Phone)

Huainan Zhao

Loughborough University - School of Business and Economics ( email )

Epinal Way
Leics LE11 3TU
Leicestershire
United Kingdom

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