Do frequent acquirers learn from their experience in serial mergers? A recent stream of literature has proposed that the generally observed declining investor response (CARs) to successive acquisitions by frequent acquirers may be evidence of learning, rather than the result of commonly attributed causes such as managerial hubris or empire-building. We examine the learning hypothesis on a global scale, using a sample of 13,326 publicly listed acquiring firms representing 72 nations conducting 27,305 acquisitions over the period 1984 through 2014. Our results provide evidence of acquirer learning on a global scale in the valuation of private targets. In contrast, we find evidence of hubris in takeovers of public targets, especially in the U.S., and other competitive takeover markets, where acquirers experience persistent, significant losses over successive acquisitions, while targets continue to reap significant gains throughout the acquisition sequence.
This is the pre-peer reviewed version of the following article: Pandey, V.K., Sutton, N.K. and Steigner, T. (2021), Learning in serial mergers: evidence from a global sample. J Bus Fin Acc. https://doi.org/10.1111/jbfa.12548, which has been published in final form at https://doi.org/10.1111/jbfa.12548. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.
Date of publication
Pandey, Vivek K.; Sutton, Ninon K.; and Steigner, Tanja, "Learning in Serial Mergers: Evidence from a Global Sample" (2021). Accounting, Finance & Business Law Faculty Publications and Presentations. Paper 7.
Pandey, V.K., Sutton, N.K. and Steigner, T. (2021), Learning in serial mergers: evidence from a global sample. J Bus Fin Acc. Accepted Author Manuscript. https://doi.org/10.1111/jbfa.12548