APPENDIX
Figure 1: Number of M&As announced and completed between 1981-2000
0 20 40 60 80 100 120 140 160 180 200 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Year N u m b e r number of mergers announced number of mergers completed
Table 1: Descriptive Statistics and Bivariate Correlations for RQ1
Mean Std.
Deviation ROA01 ROE01 ROA05 ROE05 Size Age01 Age05 Experience ROA ROE ROA01 2,211 11,780 Pearson Correlation N 74 ROE01 7,7978 33,21715 Pearson Correlation ,754(**) N 72 72 ROA05 6,1932 12,48145 Pearson Correlation ,511(**) 0,217 N 65 63 69 ROE05 17,696 35,38867 Pearson Correlation ,406(**) ,393(**) ,832(**) N 65 63 68 69 Explanatory variables Experience 7,91 13,623 Pearson Correlation -0,164 -,235(*) -0,016 0,019 ,243(*) ,252(*) ,252(*) N 74 72 69 69 70 77 77 78 Size 7,0257 2,65321 Pearson Correlation 0,084 -0,028 0,2 ,287(*) N 69 67 62 62 70 Age01 53,29 48,974 Pearson Correlation -0,071 0,007 -0,145 -0,03 ,350(**) N 73 71 69 69 69 77 Age05 57,29 48,974 Pearson Correlation -0,071 0,007 -0,145 -0,03 ,350(**) 1,000(**) N 73 71 69 69 69 77 77 ROA 7,5285 9,43241 Pearson Correlation 0,161 ,347(*) 0,239 0,182 -0,07 -0,037 -0,037 -0,049 N 53 52 50 49 52 54 54 55 55 ROE 16,755 75,94983 Pearson Correlation ,421(**) ,580(**) 0,121 ,422(**) 0,122 0,095 0,095 0,029 ,330(*) N 52 51 49 48 51 53 53 54 53 54
Model 1 Model 2 Model 3 Model 4 Tolerance(Variance Inflation Factor in parentheses)
Experience 0,878 (1,139) 0,884 (1,131) 0,842 (1,188) 0,844 (1,184) Size 0,87 (1,149) 0,889 (1,125) 0,862 (1,160) 0,849 (1,178) Age 0,881 (1,135) 0,892 (1,122) 0,878 (1,139) 0,876 (1,141) Pre-transaction performance 0,985 (1,015) 0,996 (1,004) 0,99 (1,010) 0,977 (1,023) White Heteroskedasticity F-statistic (Prob. In parentheses) 3,489 (0,004) 2,982 (0,010) 4,553 (0,001) 3,848 (0,002) Obs*R-squared (Prob. In parentheses) 20,252 (0,009) 18,216 (0,020) 23,182 (0,003) 20,892 (0,007) Cases in analysis 50 48 48 46
Note: Dependent variables in each model refer to ROA in 2001, ROE in 2001, ROA in 2005 and ROE in 2005, respectively.
Table 3: Results of Multiple Regression Analysis Predicting Acquirer Performance
Model 1 Model 2 Model 3 Model 4
(Constant) -7.865 * (4.316) -8.453* (4.224) -16.143 (13.234) -18.177 (12.575) -9.857 (6.164) -10.522 (6.274) -18.914 (16.651) -20.795 (16.931) Acquisition experience 1996-2000 -0.158* (0.087) -0.629** (0.258) -0.086 (0.125) -0.260 (0.349) Size 1.086 * (0.562) 1.314** (0.562) 1.815 (1.715) 2.692 (1.665) 2.102** (0.780) 2.255*** (0.815) 5.144** (2.180) 5.603** (2.277) Age -0.024 (0.029) -0.012 (0.029) 0.007 (0.088) 0.051 (0.085) -0.048 (0.039) -0.041 (0.041) -0.076 (0.110) -0.057 (0.114) Pre-transaction performance 0.351* (0.174) 0.340* (0.170) 0.367**** (0.074) 0.359**** (0.070) 0.384 (0.240) 0.383 (0.242) 0.200*** (0.066) 0.199*** (0.067) Adjusted R2 0.108 0.151 0.331 0.399 0.146 0.136 0.233 0.224 Cases in analysis 50 50 48 48 48 48 46 46
Note: 1. * p<0.1; ** p<0.05; *** p<0.01; **** p<0.001(standard errors in the parentheses)
Table 4: Descriptive Statistics and Bivariate Correlations for RQ2 Mean S.D. 1 2 3 4 5 1. Acquisition experience 1996-2000 5,611 7,371 Pearson Correlation 1 Sig. (2-tailed) N 72 Independent variables 2. Attitude 0,846 0,241 Pearson Correlation 0,049 1 Sig. (2-tailed) 0,681 N 72 72
3. Payment method 0,361 0,326 Pearson
Correlation -0,040 -0,344** 1
Sig. (2-tailed) 0,740 0,003
N 72 72 72
4. Geographical area 0,211 0,325 Pearson
Correlation 0,292* 0,043 0,037 1
Sig. (2-tailed) 0,013 0,722 0,756
N 72 72 72 72
5. Percentage sought 71,691 26,726 Pearson
Correlation 0,076 0,449** -0,315** -0,016 1
Sig. (2-tailed) 0,539 0,000 0,009 0,900
N 67 67 67 67 67
** Correlation is significant at the 0.01 level (2-tailed). * Correlation is significant at the 0.05 level (2-tailed).
Table 5: Result of overdispersion for acquisition experience Regression-based test
Experience_f^2 1,0234 ****(0,239)
Cases in analysis 67
Note: 1. Experience_f refers to the forecasting of acquisition experience and equals to the conditional mean of acquisition experience.
2. Dependent variable is: (Acquisition experience-Experience_f)2-Acquisition experience 3. Method: Least Squares
QML (Huber/White) QML (GLM) (Constant) 1.855**** (0.507) 1.855** (0.762) Transaction attitude -0.680 (0.511) -0.680 (0.855) Payment method -0.343 (0.498) -0.343 (0.480) Geographical area 1.052** (0.408) 1.052*** (0.372) Percentage sought 0.005 (0.004) 0.005 (0.007) Adjusted R2 0.079 0.079 cases in analysis 67 67
Note: Dependent variable: acquisition experience;
Method: ML/QML - Poisson Count (Quadratic hill climbing);
* p<0.1; ** p<0.05; *** p<0.01; **** p<0.001(standard errors in the parentheses)
Table 7: Summary of studies regarding the effect of acquisition experience on performance
Study Sample Statistical
method Performance measurement Experience measurement Result Fowler & Schmidt (1989) 42 industrial manufacturing firms engaged in major tender offer during 1975-1979 Stepwise multiple regression analyses Return on common equity (ROCE) & total return to shareholders (RSH)
The number of acquisitions made before the year of tender offer positive Haleblian & Finkelstein (1999) 449 large completed majority acquisition during 1980-1992 Ordinary least squares (OLS) Cumulative abnormal returns (CAR) The number of previous acquisitions U-shaped Hayward (2002) 214 acquisitions by 120 firms in 6 industry during 1990-1995 OLS & ordered probit model1
CAR Sum of recent
acquisitions by acquirers positive Meschi & Metais (2006) 291 acquisitions completed by French acquirers in the US during 1988-2004 Multiple regression model Average abnormal returns (AR) & CAR
The number of past acquisitions
Inversed U-shaped
