Mergers and acquisitions continue to be value destroying for many acquiring firm shareholders. Lack of continuity of tenure, agency problems and animal spirits in the acquiring and acquired firms may contribute to this loss of value. This study examines acquisitions in Australia between 1990 and 2006, when the roles of chairman and chief executive were performed by different people in the acquiring firm. The study finds that the period of joint tenure, when the Chairman and CEO have been in their respective roles together, is a statistically significant contributor to acquiring firm shareholder value during the three year period following completion of the acquisition. Agency problems and animal spirits are also found to be important influences on M&A outcomes.
|Title of host publication||Proceedings of the 24th ANZAM Conference|
|Subtitle of host publication||managing for unknowable futures|
|Publisher||Australian and New Zealand Academy of Management|
|Number of pages||16|
|Publication status||Published - 2010|
|Event||Australia and New Zealand Academy of Management Conference (24th : 2010) - Adelaide|
Duration: 8 Dec 2010 → 10 Dec 2010
|Conference||Australia and New Zealand Academy of Management Conference (24th : 2010)|
|Period||8/12/10 → 10/12/10|
Garrow, N. S. (2010). The Effect of leadership stability, agency problems, and animal spirits on M&A outcomes in Australia. In B. Gurd (Ed.), Proceedings of the 24th ANZAM Conference: managing for unknowable futures (pp. 1-16). Australian and New Zealand Academy of Management.