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  • Learning in serial mergers:...
    Pandey, Vivek K.; Sutton, Ninon K.; Steigner, Tanja

    Journal of business finance & accounting, October/November 2021, 2021-10-00, 20211001, Volume: 48, Issue: 9-10
    Journal Article

    Do frequent acquirers learn from their experience in serial mergers? A recent stream of literature has proposed that the generally observed declining investor response (cumulative abnormal returns) to successive acquisitions by frequent acquirers may be evidence of learning, rather than the result of commonly attributed causes such as managerial hubris or empire building. We examine the learning hypothesis on a global scale, using a sample of 13,326 publicly listed acquiring firms representing 72 nations conducting 27,305 acquisitions over the period 1984–2014. Our results provide evidence of institutional‐based differences in acquirer learning on a global scale in the valuation of private targets. In contrast, we find evidence of hubris in takeovers of public targets, especially in the United States, and other competitive takeover markets, where acquirers experience persistent, significant losses over successive acquisitions, while targets continue to reap significant gains throughout the acquisition sequence.