Session Details: Session 1088

Acquisitive Growth Strategies

Track F

Date: Wednesday, October 15, 2008

 

Time: 11:30 – 12:45

Common Ground

Room: Salon 7


Facilitator:
Jerayr Haleblian, University of California, Riverside

Title: Measuring Absorptive Capacity: Effects of Pre-merger Internal Knowledge, Alliances, and Minority Investments on Acquisition Performance

Authors

  • Saikat Chaudhuri, University of Pennsylvania
  • Phanish Puranam, INSEAD

Abstract: In this paper, we seek to decompose and measure the effect of different types of absorptive capacity, by examining the context of acquisitions. In such transactions, accumulated absorptive capacity can assist acquirers in the challenging tasks of evaluating and integrating the target organization. We explore these aspects through an empirical investigation of the effects of internal and external, domain-specific and target-specific, pre-merger investments on the financial and time to market performance of acquisitions in the high-technology industries. The findings are expected to enhance our theoretical understanding of learning processes, innovation management, acquisition implementation, and adaptation in changing environments.

Title: Operating Performance After M&As of Japanese Firms: An Empirical Analysis Using a Matching-firm Approach

Authors

  • Satoru Hiruta, Waseda University

Abstract: This paper examines operating performance after M&As of Japanese firms between 2000 and 2003. The M&A activity in Japan has boomed since 2000. Although the consequence of this M&A boom is of considerable interest, there are few studies systematically examining post-M&A operating performance of Japanese firms. Using a matching-firm approach to control for pre-M&A performance of acquirers and targets, I find weak evidence of operating performance improvements for the whole sample. The analysis also shows operating performance improvements when firms acquire targets in the same industry with a different business focus and when high efficiency firms acquire low efficiency targets. The findings suggest that relative performance of acquires and targets and business relatedness between acquires and targets have an interacting effect on post-M&A operating performance.

Title: Post-Acquisition Integration Timings of Change

Authors

  • Duncan Angwin, Lancaster University
  • Maureen Meadows, Coventry University

Abstract: Recent research suggests pace of change in post merger integration is an important variable in determining performance outcome. However this generic finding has not been examined in terms of the time and timing of post acquisition change in different post acquisition strategies. This paper employs cluster analysis of change patterns in acquired companies to identify different post acquisition integrations approaches and specifically examines the timing of change across these distinct strategies. Evidence is presented of significant variation in the timing of change by post acquisition strategy. This evidence allows original conceptual links to be drawn with more general organisational change typologies. The variations in the timing and nature of changes observed may have significant implications for the way in which managers consider post-acquisition change programmes and the time horizon(s) for the delivery of benefits.

Title: Serial Acquirers: Often Talked about in Practice, Seldom Examined in Academic Research

Authors

  • Kimberly Ellis, Florida Atlantic University
  • Phyllis Keys, Morgan State University

Abstract: Serial acquirers account for an increasing percentage of total M&A activity, yet limited academic research examines factors that determinant their post-deal performance. We address this issue by first reviewing business press and existing academic studies to develop what we hope will become a commonly accepted definition of a serial acquirer. Then, we test several propositions. Our results indicate market reaction to the announcement of an acquisition by a serial acquirer generates returns that are significant and positive, but lower than those of non-serial acquirers. Also, preliminary regression analyses reveal that serial acquirers engaging in a higher proportion of related prior acquisitions, allowing more time to lapse between the focal acquisition and the most recent prior acquisition, and acquiring private or subsidiary targets have higher returns.

Title: Why Do Some Acquirers Pay More for Targets?

Authors

  • Ji-Yub Kim, INSEAD
  • Jerayr Haleblian, University of California, Riverside
  • Sydney Finkelstein, Dartmouth College

Abstract: We examine growth patterns of acquirers. Specifically, we test whether firms experiencing low organic growth are more likely to pay higher premiums for their acquired targets. In addition, test whether firms that have depended on acquisitions for growth undermine their ability to grow organically, which results in dysfunctional second order effects of paying higher acquisition premiums. In addition, we hypothesize a firm’s own experience, as well as the experience of its advisors, mitigate the influence of low growth and “acquisition dependence” so firms with more access to relevant acquisition experience pay less for targets. Our results show that low growth and acquisition dependence increase acquisition premiums for targets, while acquisition experience lessens these effects, especially when both acquirer and business partners have substantial acquisition experience.

All Sessions in Track F...

Mon: 11:15 – 12:30
Session 1089: Make, Ally or Buy
Session 1096: Executive Compensation
Mon: 15:30 – 16:45
Session 1086: Alternative Views of Value Creation
Session 1090: CEO Pay
Session 1107: Executive and External Forces in Strategy
Mon: 17:00 – 18:15
Session 1091: Impression Management
Session 1098: Social Networks
Tue: 11:15 – 12:30
Session 1093: Succesion and Team Dynamics
Session 1103: Social and Human Capital
Tue: 14:30 – 15:45
Session 1095: Diversification
Session 1105: Governance Perspectives
Wed: 10:00 – 11:15
Session 1104: Managing Alliance Relationships
Session 1106: New Corporate Strategy Perspectives
Wed: 11:30 – 12:45
Session 1088: Acquisitive Growth Strategies
Session 1092: Dynamic Strategies and Resources


Strategic Management Society

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