The strategy behind serial acquisitions

Recently, Killian McCarthy, Jonas Röttger, Menno Huisman and I joined forces to explore the strategies backing serial acquisitions. These efforts resulted no into: “Moving motives: How past and present strategy influence the market

In the article that feautres in PLOSONE we discuss how research often only considers the performance of a single acquisition, or the effects of a single acquisition on the performance of the acquiring firm, showing that acquisition motive matters. However, firms often make multiple acquisitions and research recognizes that firms must both explore and exploit to sustain their competitiveness. There is evidence too to suggest that firms use some acquisitions to explore and others to exploit.

This raises a number of interesting questions. For example, do investors take the ’portfolio’ of acquisitions into account when reacting to an announcement of an acquisition? Does the market react to the switch in strategy from exploration to exploitation? And if it does, does the market prefer a switch to exploration or exploitation?

Read the full article in which we investigate the market’s reactions to serial acquirers that switch strategy here(verwijst naar een andere website).