Strategic Content Designs of Acquisition Streams:Balancing Explorative and Exploitative Acquisitions

Abstract

In recent years, researchers have become increasingly interested in serial acquirers and the performance implications of their different types of acquisition sequences. While prior research has focused mostly on the externally observable structural characteristics of these sequences, we make a finer-grained distinction between explorative and exploitative acquisitions and examine how the timing of these different types acquisitions affects acquirer performance. Based on a sample of 21.264 acquisitions of 172 largest public U.S. firms during 21 years (1990 – 2010), we find that the temporal separation of explorative and exploitative acquisitions has a positive effect on acquirer performance and that engaging in different types of acquisition simultaneously has an inverted U-shaped effect on acquirer performance. We contribute to the existing research by putting forward a novel concept, the strategic content design of acquisition streams, and by providing novel empirical evidence on the performance of acquisition streams.