Is attack the best form of defence? A competing risks analysis of acquisition activity in the UK

Andrew Dickerson, Heather Gibson and Euclid Tsakalotos

Cambridge Journal of Economics, 2003, vol. 27, issue 3, 337-357

Abstract: The primary purpose of this paper is to investigate whether companies can use acquisition as a strategy to reduce their likelihood of take-over. The determinants of making an acquisition and being taken over are modelled for the first time within a competing risks framework using two large samples of UK manufacturing companies which together cover most of the post-World War II period up to 1990. Our results indicate that, ceteris paribus, companies which make acquisitions can significantly reduce their conditional probability of being taken over by around one-third, largely through the impact that acquisition has on corporate size. In this sense, attack, through acquisition, is the best form of defence against take-over. Copyright 2003, Oxford University Press.

Date: 2003
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