This doctoral thesis consists of three articles: one literature overview and two empirical articles. The first article provides a literature overview about industrial diversification, corporate acquisitions and the intersection of both research areas. This thesis secondly analyzes whether conglomerates invest externally differently from focused firms. This investigation provides new insights on the question how industrial diversification influences corporate investment. It allows to draw conclusions whether internal investment is independent from external investment in diversified firms, or whether weak internal investment in conglomerates is (at least partially) offset by more efficient external investment, or even whether value-destructive internal investment is accompanied by external investment eliciting the same effects. In this case weakly managed multi-segment firms could be also identified by their behavior and success in corporate acquisitions. Third, the thesis copes with the question how conglomerates are perceived and treated as potential targets of corporate acquisitions. This analysis adds further aspects to the question whether multi-segment firms are discounted due to their organizational form. Assuming that the sum of the single segment of a diversified company is higher valued than the conglomerate as a whole, one could expect that investors should strive to acquire such companies, to dismantle them subsequently in order to create additional value by reshaping these inefficiently composed entities. However, there are also contradicting effects of lower synergies and higher integration costs compared to the acquisition of stand alone firms. New insights in these discussions allow us to draw conclusions whether a diversification discount potentially being harvested by a bust up takeover outweighs lower synergies and higher integration costs.

Vom 12. bis 14. Mai 2016 fand bereits zum 14. Mal der Workshop Interkulturelle Kommunikation und interkulturelles Lernen statt, der im jährlichen Wechsel vom Institut für Slawische Sprachen der Wirtschaftsuniversität Wien, dem Institut für Interkulturelle Kommunikation der Stiftung Universität Hildesheim und dem Institut für Slavistik der TU Dresden ausgerichtet wird. Der thematische Schwerpunkt war auf differenzierte Analysen kultureller und sprachlicher Hybriditäten gerichtet, während die Vorträge den vielfältigen kulturspezifisch bedingten Hybridisierungsprozessen, ihren unterschiedlichen Ausprägungen und ihren kontextuellen Funktionen, marginalen, sprachlichen und kulturellen Übernahmen sowie hochgradig hybriden Formen gewidmet waren. Die Dresdner Organisatoren Martin Henzelmann und Holger Kuße begrüßten anlässlich der Tagung Gäste aus insgesamt sieben Ländern, die die Ergebnisse ihrer aktuellen Forschungsprojekte vorstellten und diskutierten.

This doctoral thesis consists of three articles: one literature overview and two empirical articles. The first article provides a literature overview about industrial diversification, corporate acquisitions and the intersection of both research areas. This thesis secondly analyzes whether conglomerates invest externally differently from focused firms. This investigation provides new insights on the question how industrial diversification influences corporate investment. It allows to draw conclusions whether internal investment is independent from external investment in diversified firms, or whether weak internal investment in conglomerates is (at least partially) offset by more efficient external investment, or even whether value-destructive internal investment is accompanied by external investment eliciting the same effects. In this case weakly managed multi-segment firms could be also identified by their behavior and success in corporate acquisitions. Third, the thesis copes with the question how conglomerates are perceived and treated as potential targets of corporate acquisitions. This analysis adds further aspects to the question whether multi-segment firms are discounted due to their organizational form. Assuming that the sum of the single segment of a diversified company is higher valued than the conglomerate as a whole, one could expect that investors should strive to acquire such companies, to dismantle them subsequently in order to create additional value by reshaping these inefficiently composed entities. However, there are also contradicting effects of lower synergies and higher integration costs compared to the acquisition of stand alone firms. New insights in these discussions allow us to draw conclusions whether a diversification discount potentially being harvested by a bust up takeover outweighs lower synergies and higher integration costs.:List of Tables … vi List of Figures … viii List of Abbreviations … ix List of Symbols … x Introduction … xiii I. Literature review … 1 1. Literature review about diversification and corporate transactions … 2 1.1. Introduction … 5 1.2. Impact of diversification … 7 1.2.1. Diversification and firm value … 8 1.2.2. Diversification and investment … 15 1.2.3. Diversification and further firm characteristics … 20 1.3. Corporate transactions … 29 1.3.1. Drivers of acquisitions … 29 1.3.2. Characteristics of acquisitions … 40 1.3.3. Impact of corporate transactions … 47 1.4. Intersection between diversification and transactions … 54 1.5. Conclusion … 56 II. Diversification and acquisitions … 74 2. Diversification and the likelihood of acquisitions … 75 2.1. Introduction … 78 2.2. Theoretical background … 81 2.2.1. Diversification and the likelihood of acquisitions … 81 2.2.2. Diversification and deal characteristics … 84 2.2.3. Diversification and deal performance … 86 2.3. Data and methodology … 87 2.4. Descriptive statistics … 91 2.5. Diversification and corporate transactions … 92 2.5.1. Diversification and transaction probability … 92 2.5.2. Diversification and deal characteristics … 95 2.5.3. Diversification and post-acquisition performance … 98 2.6. Conclusion … 100 III. Diversification and takeover likelihood … 109 3. Do acquirers of conglomerates benefit from the diversification discount? … 110 3.1. Introduction … 113 3.2. Theoretical background … 115 3.2.1. Corporate performance, diversification and takeover probability … 115 3.2.2. Entrenchment, diversification and takeover probability … 117 3.2.3. Synergies, integration costs and takeover probability … 119 3.2.4. Bid premiums and post-acquisition returns … 120 3.3. Data and methodology ... 123 3.4. Descriptive statistics … 127 3.4.1. Successful bids and diversification … 127 3.4.2. Bids and conglomerates: univariate analysis … 129 3.5. Diversification and the likelihood of being acquired … 130 3.6. Diversification and the bid premiums paid … 134 3.7. Diversification and the CAR of the acquirer … 138 3.8. Conclusion … 140

Over the last decades, Mergers and Acquisitions (M&A) have become key strategic alternatives to organic growth, enabling firms to expand in new geographies, broaden their product or service portfolios, increase their market power or diversify their business activities, for instance. Historically, although M&A deals have occurred in cyclical patterns, the number of transactions as well the total amount invested have followed an increasing trend. For instance, in 2021, the number of M&A deals conducted worldwide even peaked at an absolute record of 63,215 deals, for a total amount of $5,800 billion, comparable to the annual GDP of a country like Japan. Although the literature on M&A is vast and multi-disciplinarian, the performance of such transactions as well as their influencing factors have remained debated issues. This paper-based dissertation investigates the implications of corporate social responsibility (CSR) on financial markets’ anticipations in the context of M&A announcements. The first manuscript (Manuscript A) corresponds to a literature review on the determinants to financial markets’ reactions around M&A announcements. The second manuscript (Manuscript B) investigates the impact of both acquirers- and targets’ CSR engagements as well as their CSR profiles distance on synergetic gains anticipated by financial markets around M&A announcements. The third manuscript (Manuscript C) focuses on the impact of acquiring firms’ CSR engagement on the accuracy of financial markets’ anticipations with regards to the long-term operating performance of M&A deals. The fourth manuscript (Manuscript D) analyses whether acquirers’ CSR performance impacts M&A premia, since the premia offered to target shareholders contain acquiring managements’ anticipations regarding potential synergetic gains and are by the way critical to the deals’ value creation processes.