Takeover Activity as a Response to Time‐Varying Changes in Investment Opportunity Sets: Evidence from Takeover Sequences

Sandy Klasa and Mike Stegemoller

Financial Management, 2007, vol. 36, issue 2, 1-25

Abstract: We study takeover sequences that contain at least five acquisitions made over a period greater than 12 months, with no two acquisitions separated by more than 24 months. Acquisitions made within such sequences represent more than a quarter of aggregate takeover activity by U.S. public firms from 1982–1999. Our fi ndings are consistent with a proposition that takeover sequences occur in the context of time‐varying changes in an acquirer's growth opportunity set. Takeover sequences begin (end) subsequent to an expansion (contraction) of this opportunity set.

Date: 2007
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