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This study uses a comprehensive sample of 5271 bidders during the period of 1995-2011 to examine the role of financial advisors on the outcomes of mergers and acquisitions in the Asia Pacific market. The results indicate that bidders take more time to complete deals when hiring tier-3 advisors. In addition, the empirical evidence indicates that bidders obtain higher announcement returns when hiring low reputation financial advisors. The results are robust when controlling for year effects, country effects and selfselection bias. In addition, the regression analysis also reveals that bidders obtain lower post-announcement returns when hiring tier-1 advisors in domestic deals. Thus, the empirical findings illustrate the importance of the quality of financial advisors on firm performance in mergers and acquisitions in the Asia Pacific market.

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This study investigates whether the quality of investment banks impacts shareholder wealth in bank mergers. Focusing on a US sample of 415 targets and 1,066 bidders from 1995 to 2010, we find that the quality of financial advisors appears to have a significant impact on shareholder wealth for bidding firms, but not for target firms. Our results find that bidders experience higher losses when hiring tier-1 advisors. Interestingly, further analysis shows that this finding holds during 'normal' periods, but not during the crisis (1997-1999 and 2007-2009) periods. With a significant negative relationship between tier-1 advisors and bidder announcement returns in the regression analysis, our results suggest that more prestigious financial advisors lead to larger losses for bidders in bank mergers. The results suggest overpayment by bidders when hiring more prestigious financial advisors in bank mergers. Our results also indicate the importance of financial advisors to bidder shareholder wealth.EFM classification: G160

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