Review of Finance, Vol. 19, pp. 1489-1541, 2015
58 Pages Posted: 15 Mar 2012 Last revised: 12 Apr 2016
Date Written: August 15, 2014
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: Suggested Citation