 The value of target’s acquisition experience in M&AIndrajeet Mohite The European Journal of Finance, 2017, vol. 23, issue 13, 1238-1266 Abstract: Organisational learning theory predicts that firms should get better in Merger and Acquisition (M&A) deals with experience. Yet, existing studies on acquisition learning document decline in acquirer gains with acquisition experience. The lower gains in subsequent acquisition deals are likely induced by exogenous factors which can conceal the acquirer’s potential to learn with experience. To tackle this issue, this study examines the value of M&A experience by concentrating on the target firms’ prior acquisitions and investigates whether experienced deal-makers learn to negotiate the deal in favour of their shareholders when they are taken over by other firms. I find that the value created by the acquirer is inversely related to the deal-making experience of the target firm and the premium received by the target shareholders is positively related to the target’s deal-making experience. Our findings offer valuable contributions to the M&A learning literature as they suggest that deal-making skills improve with experience resulting in target firms securing more benefits for their shareholders at the expense of acquirers. Date: 2017 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:eurjfi:v:23:y:2017:i:13:p:1238-1266 Ordering information: This journal article can be ordered from DOI: 10.1080/1351847X.2016.1212719 Access Statistics for this article The European Journal of Finance is currently edited by Chris Adcock More articles in The European Journal of Finance from Taylor & Francis Journals |
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