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Kauppakorkeakoulun julkaisuportaali
Aalto-yliopiston kauppakorkeakoulun gradujen tiedot nyt Aaltodocissa: Aaltodoc-julkaisuarkisto
Kauppakorkeakoulu | Rahoituksen laitos | Rahoitus | 2016
Tutkielman numero: 14620
Acquiring acquirers: Evidence from Europe
Tekijä: Valtonen, Antti
Otsikko: Acquiring acquirers: Evidence from Europe
Vuosi: 2016  Kieli: eng
Laitos: Rahoituksen laitos
Aine: Rahoitus
Asiasanat: rahoitus; financing; yritykset; companies; yrityskaupat; corporate acquisitions; tuotto; rate of return
Sivumäärä: 66
Avainsanat: corporate acquisitions; yrityskaupat; mergers; fuusiot; rate of return; tuotto; financing; rahoitus
OBJECTIVES OF THE STUDY The value creation effects of M&A activity is one of the most researched phenomena within the corporate finance literature. Especially the close to zero and negative announcement returns realized to the acquirer has had their fair share of spotlight. However, the recent papers have mainly been focusing on the traditional drivers behind M&A value creation effects and have disregarded how target's prior acquisition activity might impact this phenomenon. I follow the paper of Phalippou et al. (2015) studying acquisitions of acquisitive targets and provide comparable results of such acquisitions from European perspective, by using the "eat or be eaten" theory of Gorton et al. (2009) as my motivation.

DATA AND METHODOLOGY The sample used in this thesis is gathered from the SDC and Datastream databases and covers the years from 1995 to 2014.The main sample comprises of 727 individual M&A deals completed in one of the EU14 countries, of which 71 (9.77%) are deals where the target has made prior acquisitions over the preceding five years before the acquisition announcement. The secondary sample also includes withdrawn deals and has 890 individual observations. The thesis uses OLS and logistic regression models to assess the hypotheses based on the recent academia and highly motivated by the "eat or be eaten" theory of Gorton et al. (2009).

MAIN FINDINGS I find no significant relationship between the number of target's prior acquisitions and target's announcement returns. However, acquirer announcement returns are significantly and negatively driven by the number of target's prior acquisitions, on average decreasing by -0.81% when target's number of prior acquisitions increases by one. I also find that acquisitive targets are able to resist takeover attempts 12.63% more often and that failing to acquire an acquisitive target significantly increases acquirer's probability of being acquired over the following five years 103.70% more than failing to acquire a non-acquisitive target. In addition, I find acquisitive targets to only significantly destroy acquirer shareholder value when the industry concentration is lower, the relative target size is higher, the deal occurs pre-merger wave, and when the deal is a cross-industry or an intra-border deal. In Europe, the results are only partially supportive of the idea that acquisitions of acquisitive firms would have a defensive nature. The value-destroying nature could also arise from the fact that acquisitive targets are simply able to resist takeover attempts more often, making the acquisition more expensive for the acquirer.
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