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Long-term performance of mergers and acquisitions in ASEAN countries

Lookup NU author(s): Dr Rekha Nicholson

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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND).


Abstract

The study looks at mergers and acquisitions (M&As) in ASEAN countries and examines the post-M&A performance using data from 2001 to 2012. The industry-adjusted operating performance tends to decline in the 3 years following an M&A. Yet, the results suggest that M&As completed during the financial crisis are more profitable than those implemented before and/or after the crisis. We argue that this is mainly due to the synergies created between the firms’ resources during the crisis which augur well for firms’ economic performance. We find that, during the crisis, certain characteristics of the firms like the relative size of the target, cross-border nature of deals, acquirer's cash reserves and friendly nature of deals are important determinants of long-term post-M&A operating performance. However, for M&As during the crisis, there appears to be no relationship between performance and firms’ characteristics linked to M&A activity such as payment method, industry relatedness and percentage of target's share acquired.


Publication metadata

Author(s): Rao-Nicholson R, Salaber J, Cao TH

Publication type: Article

Publication status: Published

Journal: Research in International Business and Finance

Year: 2016

Volume: 36

Pages: 373–387

Print publication date: 01/01/2016

Online publication date: 28/09/2015

Acceptance date: 10/09/2015

ISSN (print): 0275-5319

ISSN (electronic): 0275-5319

Publisher: Elsevier Inc.

URL: http://dx.doi.org/10.1016/j.ribaf.2015.09.024

DOI: 10.1016/j.ribaf.2015.09.024


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