Search results

This paper investigates the relationship between divestiture activity and subsequent acquisition deal-making. We argue that the divestiture activity of firms influences their acquisition behavior through corporate restructuring learning effects and enhanced strategic flexibility. These organizational spillovers affect not only the degree of risk acquirers are ready to take but also their ability to effectively negotiate with the target firm. We test the existence of organizational spillovers for an international sample of 4,795 acquirers for the period 1990–2008 and get support for our theoretical predictions.