Slow but Certain: The Pre-M&amp;A Process of European National Champion Deals

Booij, Morne; Sahib, Padma Rao

doi:10.1108/s1479-361x(2012)0000011006

Cited by 2 publications

(3 citation statements)

References 19 publications

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“…Acquisition duration is affected by the public status of the target firm. Past studies document that the duration of M&A transactions is longer for public target acquisitions (Agrawal et al, 2013;Booij & Rao Sahib, 2012;Chang et al, 2016;Dikova et al, 2010;Li et al, 2017). When the target firm is a public firm, there is a requirement by legislators, for example, stock exchange and securities commission which may not be required when the target firm is a private firm.…”

Section: Target Statusmentioning

confidence: 99%

The impact of chief executive officer (CEO) and deal characteristics on mergers and acquisitions (M&A) duration: A quantile regression evidence from an emerging market

Al-Sabri¹,

Nordin²,

Shahar³

2022

AAMJAF

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This paper examines the impact of chief executive officer (CEO) and deal characteristics on mergers and acquisitions (M&A) duration in Malaysia. Univariate analysis and quantile regression (QR) are performed on 556 completed M&As transactions undertaken by Malaysian public firms from 2001 to 2019. In line with the upper echelons theory, which states that organizational outcomes can be predicted by looking at the characteristics of top-level executives, the findings from QR show that CEO characteristics significantly affect acquisition duration. This effect is conditional on the duration quantiles for CEO tenure and CEO duality but non-conditional for foreign CEO. Specifically, the findings reveal that the degree of influence by CEO characteristics gets stronger when the transactions are longer and complicated. CEO tenure can decrease M&A duration when a transaction falls in longer duration quantile. M&A transactions tend to take a longer duration when there is CEO duality. Foreign CEOs show more ability to execute transactions in a short duration compared to local CEOs. Deal characteristics such as deal size, merger transaction, hiring a financial advisor and conducting multiple acquisitions are main factors that prolong duration. The findings of this study may benefit policymakers, managers, and investors who involve directly and indirectly in an M&A process.

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Section: Target Statusmentioning

confidence: 99%

The impact of chief executive officer (CEO) and deal characteristics on mergers and acquisitions (M&A) duration: A quantile regression evidence from an emerging market

Al-Sabri¹,

Nordin²,

Shahar³

2022

AAMJAF

View full text Add to dashboard Cite

show abstract

“…To control for acquirer firm's key characteristics, a set of acquirer firm-specific variables were included, including Firm size (in log), measured as the natural logarithm of the acquirer firm's total assets (US$ million; Kling, Ghobadian, Hitt, Weitzel, & O'Regan, 2014); Profitability, measured as the preacquisition return on equity (%; Kling et al, 2014); R&D intensity, measured as R&D expenditure as a percentage of net sales (Makri, Hitt, & Lane, 2010); Firm age (in log), calculated as the natural logarithm of the greatest number among years since the founding date, years since the first appearance of CRSP, or years since IPO date (Brown, Helland, & Smith, 2006); Acquisition experience (in log), measured as the natural logarithm of number of acquisitions completed in the past (Booij & Rao Sahib, 2012); and Leverage, measured as the book value of debt (debt in current liability plus long-term debt) as a ratio to the book value of total assets (Bonaime et al, 2018).…”

Section: Control Variablesmentioning

confidence: 99%

“…Acquisition experience (in log) Natural logarithm of number of acquisitions completed in the past (Booij & Rao Sahib, 2012).…”

Section: Compustatmentioning

confidence: 99%

Shareholder wealth effects of cultural diversity among blockholders: Evidence from cross‐border acquisitions by U.S.‐listed companies

Chen

2019

Corporate Governance

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Research question/issue: This paper studies whether and how diversity among blockholders in their cultural preferences may affect short-term shareholder wealth.Blockholders often hold diverse objectives, leading to principal-principal (PP) conflicts in cross-border acquisitions (CBAs). The literature, however, is unclear on whether they have diverse cultural preferences when it comes to the location choice in CBAs and, if so, how such diversity affects short-term shareholder wealth surrounding the announcement of a CBA. Integrating agency and resource dependence perspectives, this paper argues that such diversity has an inverted U-shaped relationship with shareholder wealth. Research findings/insights: The theory is tested using a sample of 2,571 nonfinancial CBAs made by U.S.-listed companies between 2002 and 2014. Results suggest an inverted U-shaped relationship between diversity in host-market cultural distance propensities among five types of blockholders (family, corporations, bank and insurance companies, resistant financial institutions, and government) and the cumulative abnormal returns (CARs) attributable to CBA announcements. Theoretical/academic implications: First, international corporate governance scholars should understand the nonfinancial motivations of shareholders when evaluating potential conflicts in internationalization strategy and performance. Second, future studies should recognize that PP issues in the multinational firm are a multidimensional construct, composed of multiple sources of conflicts beyond the traditional focus on controlling-versus-minority shareholders. Lastly, the PP literature should shift its rhetoric from conflicts to a good balance between benefits and conflicts, depending on the degree of heterogeneity among principals.Practitioner/policy implications: An optimal ownership structure may involve moderate diversity among blockholders in their nonfinancial preferences. This optimal level should bring in diverse resources and perspectives from different blockholders, while keeping coordinating costs moderate for aligning different goals of these blockholders.

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Slow but Certain: The Pre-M&A Process of European National Champion Deals

Cited by 2 publications

References 19 publications

The impact of chief executive officer (CEO) and deal characteristics on mergers and acquisitions (M&A) duration: A quantile regression evidence from an emerging market

The impact of chief executive officer (CEO) and deal characteristics on mergers and acquisitions (M&A) duration: A quantile regression evidence from an emerging market

Shareholder wealth effects of cultural diversity among blockholders: Evidence from cross‐border acquisitions by U.S.‐listed companies

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