In the dog-eat-dog world of corporate acquisitions, taking more time between deals may yield more profitable outcomes, according to a study presented by UC Riverside’s School of Business and published in the Journal of Business Research.
“Our findings suggest that gradually increasing the time between acquisitions can better position firms to learn and improve from each experience and thus get the most out of each buyout,” says Jerayr “John” Haleblian, a professor of management in UC Riverside’s School of Business and co-author of the report.
Key takeaways:
· Companies spacing out their acquisitions with longer intervals are rewarded by investors with higher stock values.
· The study’s findings run counter to previous research that favored even acquisition pacing as the most profitable strategy.
· Companies that steadily increased the time between acquisitions outperformed those that rushed into deals with shorter intervals.
