Antecedents of Time to Completion in Mergers and Acquisitions
Luypaert, Mathieu De Maeseneire, Wouter
Luypaert, Mathieu
De Maeseneire, Wouter
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Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2015
Journal
Applied Economics Letters
Book
Publication Volume
22
Publication Issue
4
Publication Begin page
299
Publication End page
304
Publication NUmber of pages
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Abstract
Literature on mergers and acquisitions (M&As) performance and wealth effects is abundant. Yet, we know very little about the pre-completion stage, in particular about aspects such as the likelihood of deal closing and time to completion. Understanding the drivers of completion time is however important as prolonged deal duration is costly and postpones realizing synergy gains. In this article, we study the antecedents of deal duration for a sample of 1150 M&As between listed US companies during 1994-2011. Not surprisingly, deal complexity critically affects time to completion. Stock offers, deal hostility, mergers and larger deals are characterized by a lengthier acquisition duration. Strong and clear shareholder support accelerates deal completion, as does the likelihood of overpayment. Finally, experienced bidders succeed in more rapidly completing transactions, implying learning effects.
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Keywords
Accounting & Finance, Mergers & Acquisitions