Reactions to Acquisition Announcements and Acquisition Completion

Abstract

An obvious way to improve acquisition performance is to avoid completing value-destroying acquisitions. However, once announced, manager motivations often focus on completing acquisitions. The authors develop how external governance actors can interpret acquisition characteristics and make counter-signals that acquiring firm managers could use to improve acquisition outcomes. The authors specifically develop how managers may react to counter-signals by shareholders, media, analysts, and short sellers. While there is limited research considering these external governance actors, evidence suggests that managers’ reactions to these actors may vary. A more integrated assessment of external governance actors’ influence on acquisition completion offers an opportunity to better understand acquisition processes and performance.

Citation

King, D.R., Shi, W. and Connelly, B.L. (2021), "Reactions to Acquisition Announcements and Acquisition Completion", Cooper, C.L. and Finkelstein, S. (Ed.) Advances in Mergers and Acquisitions (Advances in Mergers and Acquisitions, Vol. 20), Emerald Publishing Limited, Leeds, pp. 25-38. https://doi.org/10.1108/S1479-361X20210000020003