Hostility and deal completion likelihood in international acquisitions: The moderating effect of information leakage

Ngo, Thanh; Susnjara, Jurica

doi:10.1016/j.gfj.2016.04.002

Cited by 14 publications

(8 citation statements)

References 34 publications

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“…New information revealed after the deal announcement leads to changes in profitability (Hotchkiss et al , 2005). Preventing leakage of information is vital for merger negotiation (Ngo and Susnjara, 2016). However, an early strategic announcement about the synergies reduces friction and increases completion (Aktas et al , 2018).…”

Section: Content Analysismentioning

confidence: 99%

Abandonment of mergers and acquisitions: a review and research agenda

Kumar

Sengupta

2020

IJOEM

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PurposeThe purpose of this study is to provide a broad understanding of the pre-completion stage and subsequent abandonment of mergers and acquisitions (M&As).Design/methodology/approachA total of 117 peer-reviewed, English language articles published in scholarly journals were considered in the review. The approach includes a descriptive evaluation of the literature, coupled with content analysis. The paper uses both positivist and constructivist approaches to qualitative research. The analysis is conducted with the help of R programming and Gephi visualization software. The authors organize the work around the event of outcome/closure of deal proposal.FindingsIt is found that earlier studies sampled on domestic M&As in developed economies (DEs). However, the interest of scholars has increased in cross-border deals and emerging economies (EEs) in the last decade. Various factors interact and facilitate the completion/abandonment of good and bad deals. The authors find that complex non-linear relationships exist, and there is a need for studies with other classification techniques focusing on predictive accuracy.Research limitations/implicationsThe literature review is limited to articles available to the researcher using search terms related to M&A completion/termination. The databases accessed were: ProQuest, Scopus and Web of Science. However, backward snowballing was performed to avoid the omission of relevant articles.Originality/valueThe findings and subsequent discussions familiarize researchers and practitioners with an overview of research undertaken in the field of M&A abandonment. The authors find voids within the literature and suggest future research agendas.

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Section: Content Analysismentioning

confidence: 99%

Abandonment of mergers and acquisitions: a review and research agenda

Kumar

Sengupta

2020

IJOEM

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“…Thus, success or failure of the deal means “completion or incompletion of the publicly announced acquisition,” “agreement or disagreement of the deal.” To the best of our knowledge on M&A stream, there is a dearth of research on the completion likelihood of M&A transactions across the world economy for reasons, including the causes of abandoned negotiations, the determinants of failed takeovers, stock performance around negotiation process, and the roles of top-level management team in delayed or unsuccessful deals (except some recent studies, e.g. Caiazza and Pozzolo, 2016; Ngo and Susnjara, 2016; Muehlfeld et al , 2012). Although a large amount of research has published on why M&A fail to create value to shareholders (announcement returns) and fail to improve accounting performance (post-merger stage) in corporate finance and strategy literatures (Asquith, 1983; Chang and Suk, 1998; De Bernardis and Giustiniano, 2015; McCann and Ackrill, 2015; Munjal and Pereira, 2015; also see reviews by Ferreira et al , 2014b; Haleblian et al , 2009; Lebedev et al , 2015; Marks and Mirvis, 2011; Martynova and Renneboog, 2008; Reddy, 2014; Shimizu et al , 2004; Yaghoubi et al , 2016), there are hardly a few empirical/survey studies that analyze abandoned deals or completion likelihood of M&A negotiations (Dikova et al , 2010; Graebner et al , 2010; Muehlfeld et al , 2007, 2012; Ngo and Susnjara, 2016; Roos and Postma, 2016; Zhang et al , 2011).…”

Section: Theoretical Framework and Relevant Literaturementioning

confidence: 99%

“…Caiazza and Pozzolo, 2016; Ngo and Susnjara, 2016; Muehlfeld et al , 2012). Although a large amount of research has published on why M&A fail to create value to shareholders (announcement returns) and fail to improve accounting performance (post-merger stage) in corporate finance and strategy literatures (Asquith, 1983; Chang and Suk, 1998; De Bernardis and Giustiniano, 2015; McCann and Ackrill, 2015; Munjal and Pereira, 2015; also see reviews by Ferreira et al , 2014b; Haleblian et al , 2009; Lebedev et al , 2015; Marks and Mirvis, 2011; Martynova and Renneboog, 2008; Reddy, 2014; Shimizu et al , 2004; Yaghoubi et al , 2016), there are hardly a few empirical/survey studies that analyze abandoned deals or completion likelihood of M&A negotiations (Dikova et al , 2010; Graebner et al , 2010; Muehlfeld et al , 2007, 2012; Ngo and Susnjara, 2016; Roos and Postma, 2016; Zhang et al , 2011). In fact, some recent literature-review papers have confirmed the scant research in this particular stream – negotiation process (Ahammad et al , 2016; Caiazza and Volpe, 2015; Friedman et al , 2015; Lee et al , 2014).…”

Section: Theoretical Framework and Relevant Literaturementioning

confidence: 99%

The causes and consequences of delayed/abandoned cross-border merger & acquisition transactions

Reddy

Xie

Huang

2016

JOCM

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Purpose Drawing attention to the significant number of unsuccessful (abandoned) cross-border merger and acquisition (M&A) transactions in recent years, the purpose of this paper is to analyze three litigated cross-border inbound acquisitions that associated with an emerging economy – India, such as Vodafone-Hutchison and Bharti Airtel-MTN deals in the telecommunications industry, and Vedanta-Cairn India deal in the oil and gas exploration industry. The study intends to explore how do institutional and political environments in the host country affect the completion likelihood of cross-border acquisition negotiations. Design/methodology/approach Nested within the interdisciplinary framework, the study adopts a legitimate method in qualitative research, that is, case study method, and performs a unit of analysis and cross-case analysis of sample cases. Findings The critical analysis suggests that government officials’ erratic nature and ruling political party intervention have detrimental effects on the success of Indian-hosted cross-border deals with higher bid value, listed target firm, cash payment, and stronger government control in the target industry. The findings emerge from the cross-case analysis of sample cases contribute to the Lucas paradox – why does not capital flow from rich to poor countries and interdisciplinary M&A literature on the completion likelihood of international takeovers. Practical implications The findings have several implications for multinational managers who typically involve in cross-border negotiations. The causes and consequences of sample cases would help develop economy firms who intend to invest in emerging economies. The study also offers some implications of M&A for telecommunications and extractive industries. Originality/value Although a huge amount of extant research investigates why M&A fail to create value to the shareholders during the public announcement and post-merger stages, there is a significant dearth of research on the causes and consequences of delayed or abandoned national and international deals. The paper fills this knowledge gap by discussing an in-depth cross-case analysis of Indian-hosted cross-border acquisitions.

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“…The focus in acquisition completion literature is on the public takeover period which starts from the public announcement and ends at the resolution of an acquisition deal (Muehlfeld et al , 2007, 2012; Dikova et al , 2010; Zhang et al , 2011; Caiazza and Pozzolo, 2016; Lim and Lee, 2016, 2017; Ngo and Susnjara, 2016; Zhou et al , 2016; Doan et al , 2018; He and Zhang, 2018). The M&A completion research is confined to bids completed or bids abandoned after a public announcement because decisions regarding completion or abandonment after a public announcement are more likely to be determined by the acquirer with more available information (Dikova et al , 2010; Lim and Lee, 2017).…”

Section: Introductionmentioning

confidence: 99%

Distance and the completion of Chinese cross-border mergers and acquisitions

Dong

McDonald

et al. 2019

BJM

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The purpose of this study is to draw attention to the significant lower completion rate of mergers and acquisitions (M&As) by firms from emerging economies (China in particular) compared with firms from advanced economies, and to identify the country-and industry-level factors that affect the completion of cross-border M&As by Chinese firms. Design/methodology/approach-This study explores the effects of economic, cultural, and institutional distances and target firms in technology-and knowledge-intensive industries on the completion of cross-border M&As by Chinese firms. It also examines the interplay between distance factors and technology-and knowledge-intensive industries on cross-border M&A completion. This study adopts a quantitative approach and is based on a sample of 768 announced cross-border M&A deals by firms in China between 2000 and 2015. Findings-The results indicate that economic distance increases the likelihood of the completion of cross-border M&As when the target is in a more developed economy than China, but decreases when the target is in a less developed economy. Cultural and institutional distances have a significant, negative impact on the completion of cross-border M&As. In addition, target technology-intensive industries have a significant direct negative effect on cross-border M&A completion and moderate the relationship between the distance factors and the likelihood of cross-border M&A completion. Research limitations/Implications-The results reveal factors that affect the completion of cross-border M&As by emerging market firms (EMFs). Further research, however, is needed to discover how distance factors affect how EMFs find, evaluate, and negotiate international bids. To broaden the scope of the research, data for firms from other emerging economies would also be required. Originality/Value-The study expands the literature that considers the effects of major distances on cross-border M&A completion. In addition, the importance of defining and measuring distances in the context of cross-border M&As is highlighted. Finally, the study expands knowledge on how cross-border M&As affect the internationalization strategies of EMFs by conceptualising and testing how target industries affect cross-border M&A completion.

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Hostility and deal completion likelihood in international acquisitions: The moderating effect of information leakage

Cited by 14 publications

References 34 publications

Abandonment of mergers and acquisitions: a review and research agenda

Abandonment of mergers and acquisitions: a review and research agenda

The causes and consequences of delayed/abandoned cross-border merger & acquisition transactions

Distance and the completion of Chinese cross-border mergers and acquisitions

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