Mergers and acquisitions in Australia: reasons and timing

This study addresses mergers and acquisitions in Australia, particularly fluctuations in the merger rate, the role of the business cycle in such fluctuations, the reasons for mergers and their role in explaining any cyclical variability and the parallels between the timing of merger fluctuations in Australia and in USA and UK. The international and Australian merger literature is reviewed, consistent merger data for Australia for 1949-2007 are assembled for the first time and both qualitative and econometric analyses are undertaken of merger trends and business cycles in the three countries. Six main conclusions are reached. First, the Australian merger rate has had a significant downward trend over 1949-2007, with pronounced periods of variability over time. Secondly, these fluctuations in the merger rate show clear pro-cyclical behaviour in some cycles but limited or no pro-cyclical variation in other cycles, a phenomenon we refer to as selective cyclical sensitivity. Thirdly, this finding is confirmed by simple econometric analyses: there are limited signs of the significance of a cyclical measure over the full period, but when the 1972-1984 period is excluded the cyclical variable is significant at the 5% level. Fourthly, merger reason variables do not appear to explain selective nature of cyclical sensitivity nor, fifthly, is there any evidence that merger reasons can explain the overall temporal pattern of merger waves in a systematic fashion. Finally, merger activity in Australia is closely correlated with that in UK, while there is no significant relationship between mergers patterns in Australia and USA.

Name dc:type.qualificationname

other

Level dc:type.qualificationlevel

other

Grantor dc:publisher.institution

Victoria University

Year dc:date.issued

2010

Author dc:creator

• Karagiannidis, Socrates

• 1402 Applied Economics
• Centre for Strategic Economic Studies (CSES)
• 1503 Business and Management

Language dc:language

en