Influence of acquirer boards on M&A value creation. Evidence from continental Europe
Defrancq, Corneel Huyghebaert, Nancy Luypaert, Mathieu
Defrancq, Corneel
Huyghebaert, Nancy
Luypaert, Mathieu
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Publication Type
Journal article with impact factor
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Supervisor
Publication Year
2021
Journal
Journal of International Financial Management & Accounting
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Publication Volume
32
Publication Issue
1
Publication Begin page
21
Publication End page
62
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Abstract
We examine how the size and the composition of acquirer boards are associated with shareholder abnormal returns for 2,230 M&As made by listed firms in Continental Europe. Although board size proves insignificant, our findings do offer some evidence as to a beneficial effect of board diversity on M&A value creation. Gender diversity appears marginally positively associated with acquirer shareholder abnormal returns. The fraction of foreign directors is in general not significantly positive, unless the rule of law in the acquirer country is weak. Nonetheless, nationality diversity in the board turns out harmful in purely domestic takeovers. The influence of age diversity is marginally positive, yet only in domestic and horizontal takeovers. Next, the fraction of independent directors has a robust positive effect on the acquirer CAR, while directors with multiple board appointments prove valuable especially through preventing firms from pursuing poor takeovers. Finally, CEO duality is detrimental only in industry‐diversifying deals initiated by acquirers that are not controlled by an individual or a family shareholder. Any negative CEO‐duality effect is mitigated when the acquirer‐country rule of law is strong.
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Keywords
Board of Directors, Corporate Governance, Europe, Mergers and Acquisitions