Acquisition Overload: Capacity Limitations and the Distribution of Acquisitions Across Business Units

Item Type Monograph (Discussion Paper)
Abstract

We investigate how serial acquirers alleviate "indigestion" effects through distributing acquisitions across multiple business units. Consistent with the information processing view of organizations, we argue that both the number and diversity of acquisitions are related to the distribution of acquisitions across multiple business units. In addition, we argue that the distribution of acquisitions across business units has an inverted U-shaped relationship with acquirer performance. Thus, neither the spread of a few acquisitions across multiple units nor the concentration of multiple acquisitions within a few firm units is associated with superior firm performance. Studying a sample of 14,213 acquisitions conducted by the 250 largest public US firms over a 21-year period (1991-2010) provides empirical support for our arguments.

Authors Luger, Johannes & Laamanen, Tomi
Language English
Keywords Acquisitions, Overload, Information Processing, Acquisition sequences, Indigestion
Subjects business studies
HSG Classification contribution to scientific community
Refereed No
Date 27 July 2015
Publisher Universität St. Gallen
Number 1
Page Range 1-22
Number of Pages 22
Depositing User Prof. Dr. Johannes Luger
Date Deposited 27 Jul 2015 23:08
Last Modified 23 Aug 2016 11:21
URI: https://www.alexandria.unisg.ch/publications/242756

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Citation

Luger, Johannes & Laamanen, Tomi: Acquisition Overload: Capacity Limitations and the Distribution of Acquisitions Across Business Units. Nr. 1 : Universität St. Gallen, 2015, S. 1-22.

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https://www.alexandria.unisg.ch/id/eprint/242756
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