Abstract
This study investigates the influence of diversification and ownership structure on long-term post-merger stock returns performance of Australian acquirers. Using hand-collected stock ownership data for bidding firms involved in 821 mergers covering period of 1997 to June 2009, long-term abnormal stock return performance was evaluated by using both the event-time and calendar-time approaches. Findings reveal that, there is indication of long-term underperformance of Australian acquirer. However, there is limited evidence of inter-group difference in performance. In further analysis, we find evidence that the market reacts positively to merger news for acquirers with high concentration of external substantial shareholders, especially when is the focus merger.
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