University of Twente Student Theses


An investigation into the motives that lead to firm acquisitions

Zeventer, Daan van (2019) An investigation into the motives that lead to firm acquisitions.

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Abstract:In today’s highly competitive business environment that sees constantly changing customer requirements and thus company required adaptations and innovations, company acquisitions are sometimes a suitable way to keep the company flexible and involved in all the required aspects of business. Through the analysis of existing M&A literature, we found motives with potential influence on acquisition decisions. Namely, synergy, agency and hubris. Acquisitions, the motives and the correlations between synergy, agency and hubris have been thoroughly researched in a multitude of settings, countries and using a wide variety of data samples. This research paper set out to build upon already existing research and attempting to add to this research by associating various independent variables to the motives based upon existing literature and testing for the results using an OLS regression. Our sample consists of 104 acquisition announcements in Western Europe between 2007 and 2018. Our findings suggest that approximately 56.7% of acquisitions in our dataset were motivated by synergy.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Keywords:Acquisitions, Synergy, Agency, Hubris, Regression, OLS, Listed, Euronext, CAR, Total gains, Target gains, Acquirer gains, Event study
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