Solving Serial Acquirer Puzzles

62 Pages Posted: 29 Oct 2022 Last revised: 24 Jun 2023

See all articles by Antonio J. Macias

Antonio J. Macias

Baylor University

P. Raghavendra Rau

University of Cambridge

Aris Stouraitis

Hong Kong Baptist University

Date Written: June 23, 2023

Abstract

Using a novel typology of serial acquirers, we examine several puzzles documented in prior literature. We show that acquisitions by different types of acquirers are driven by different factors, they acquire different sizes of targets, and subsequent acquisitions by acquirers are predictable ex ante. Controlling for market anticipation, the most frequent serial acquirers do not earn declining returns as they continue acquiring, while less frequent acquirers do. Our methodology enhances our understanding of serial acquisition dynamics, anticipation, and economic value adjustments. The methodology is likely to be relevant to topics related to event anticipation beyond those covered in this study.

Keywords: Mergers, Acquisitions, M&A, Serial acquirers, Anticipation, Return Persistence, Misvaluation

JEL Classification: G14, G34, G35

Suggested Citation

Macias, Antonio J. and Rau, P. Raghavendra and Stouraitis, Aris, Solving Serial Acquirer Puzzles (June 23, 2023). Available at SSRN: https://ssrn.com/abstract=4258371 or http://dx.doi.org/10.2139/ssrn.4258371

Antonio J. Macias

Baylor University ( email )

Hankamer School of Business
Waco, TX 76798
United States

P. Raghavendra Rau (Contact Author)

University of Cambridge

Trinity Ln
Cambridge, CB2 1TN
United Kingdom

Aris Stouraitis

Hong Kong Baptist University

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