The Effect of Takeovers on the Performance of Acquirers in Australia Based on The Economic Value Added Method

DOI

10.2991/aebmr.k.220603.015How to use a DOI?

Keywords

Takeover; Australia; EVA

Abstract

In theory, the acquisition is a fast way to expand a business or enter a new market, so the bidder company should perform better after the takeover. Research has been conducted on whether the performance of the bidder company can be improved after the acquisition, but the empirical results do not fully support the theory. Moreover, the studies on takeover activities in Australia are relatively rare. This paper examines bidding companies’ performance in public acquisitions in Australia in 2017 based on EVA accounting methodology. We collect the data from 2013 to 2021 of the acquirer companies that bought the target companies in 2017 and calculate the acquirer companies’ performance by EVA. We then compare their EVA before and after the acquisition and analyze the effect of the acquisition, demonstrating the average EVA experienced a slight rise in the three years after the acquisition. Two companies had a positive EVA after the acquisition, while the EVA of all the companies were negative before.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article distributed under the CC BY-NC 4.0 license.

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TY  - CONF
AU  - Bowen Sun
PY  - 2022
DA  - 2022/07/01
TI  - The Effect of Takeovers on the Performance of Acquirers in Australia Based on The Economic Value Added Method
BT  - Proceedings of the 2022 2nd International Conference on Enterprise Management and Economic Development (ICEMED 2022)
PB  - Atlantis Press
SP  - 79
EP  - 82
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220603.015
DO  - 10.2991/aebmr.k.220603.015
ID  - Sun2022
ER  -