• Acquisitions: a curse or blessing for direct competitors? The impact of target ownership structure  

      Mataigne, Virginie; Luypaert, Mathieu; Manigart, Sophie (Journal of Corporate Finance, 2021)
      This study examines the impact of horizontal acquisition announcements on the value of direct competitors of the combined entity. We argue that the ownership structure of the target drives competitor wealth effects. First, the stronger disciplining force of the market for corporate control for public firms compared to private firms will lead to higher competitive pressure post-acquisition when a public firm is acquired, leading to more negative valuation effects of direct competitors. Second, acquisitions of subsidiary targets, compared to stand-alone targets, are expected to lead to stronger asset utilization improvements in the target, leading to more negative competitor returns. A unique hand-collected sample of 1,038 direct competitors of 228 horizontal acquisitions in Europe empirically supports these hypotheses. Alternative explanations, such as information asymmetry or empire-building, are rejected.
    • Antecedents of growth through mergers and acquisitions. Empirical results from Belgium

      Huyghebaert, Nancy; Luypaert, Mathieu (Journal of Business Research, 2010)
    • Antecedents of Time to Completion in Mergers and Acquisitions

      Luypaert, Mathieu; De Maeseneire, Wouter (Applied Economics Letters, 2015)
      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.
    • Antecendents of Growth through Mergers and Acquisitions. Empirical Results from Belgium

      Huyghebaert, Nancy; Luypaert, Mathieu (Journal of Business Research, 2010)
    • Can auditors mitigate information asymmetry in M&A's? An empirical analysis of the method of payment in belgian transactions

      Luypaert, Mathieu; Van Caneghem, Tom (Auditing: A Journal of Practice and Theory, 2014)
    • Exploring the Double-Sided Effect of Information Asymmetry and Uncertainty in Mergers and Acquisitions

      Luypaert, Mathieu; Van Caneghem, Tom (Financial Management, 2017)
      We examine the joint effect of bidder and target information asymmetry and uncertainty on the payment consideration and subsequent wealth effects in a large sample of acquisitions with both listed and private targets. In line with a risk-sharing argument, we find that acquisitions of targets characterized by higher uncertainty are more likely to be settled with stock. In contrast, higher target information asymmetry increases the likelihood of a cash payment, consistent with bidders strategically exploiting superior information. Acquirers of more opaque targets obtain a larger fraction of total acquisition gains and avoid sharing these gains with target shareholders by offering cash.
    • Financial statement filing lags: an empirical analysis among small firms

      Luypaert, Mathieu; Van Caneghem, Tom; Van Uytbergen, Steve (International Small Business Journal, 2016)
      This article examines financial statement filing lags among a sample of Belgian small firms. Our results indicate that around one-third of small firm financial statements are filed late (after the legal deadline), but that monetary sanctions could be an effective tool to encourage compliance with legal deadlines. Whereas the deadline and late filing sanctions are filing incentives, various factors, such as firm size and presence of an external financial statement audit, also affect financial statement filing lags. Evidence indicated that extremely late filings were associated with lower financial statement quality.
    • Influence of acquirer boards on M&A value creation. Evidence from continental Europe

      Defrancq, Corneel; Huyghebaert, Nancy; Luypaert, Mathieu (Journal of International Financial Management & Accounting, 2021)
      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.
    • Influence of family ownership on the industry-diversifying nature of a firm's M&A strategy: Empirical evidence from Continental Europe

      Defrancq, Corneel; Huyghebaert, Nancy; Luypaert, Mathieu (Journal of Family Business Strategy, 2016)
      We investigate how family ownership influences the industry-diversifying nature of M&As by listed companies in Continental Europe and the corresponding shareholder value effects at deal announcement. For a large sample of 3485 M&As during 2005-2013, we observe that acquirers having a family as the largest shareholder are less inclined to take over an unrelated target firm than lone-founder and other types of non-family firms. However, as the size of the family ownership stake increases, family firms become more eager to follow an industry-diversifying M&A strategy. While industry-diversifying M&As are associated with lower abnormal returns for acquirer shareholders on average, we also observe that family ownership fully reverses this negative effect. We therefore conclude that those unrelated M&As, although still representing a conflict of interest with the family firm's minority investors, do not destroy shareholder value on average.
    • Sources of synergy realization in mergers and acquisitions: empirical evidence form non-serial acquirers in Europe

      Huyghebaert, Nancy; Luypaert, Mathieu (International Journal of Financial Research, 2013)
      Innovating firms often invest in a number of different technology projects, in different stages of development, using a wide range of distinct technology sourcing modes, such as strategic alliances, joint ventures, and mergers and acquisitions. Recently, firms have also gained an increasing awareness of the potential benefits of corporate venture capital investments. This paper investigates the particular role of corporate venture capital investments in the technology sourcing portfolio of firms. More specifically, we focus on the extent to which corporate venture capital investments are additive or complementary to other modes of technology sourcing when explaining the innovative performance of firms. The results indicate that corporate venture capital investments are particularly beneficial for the innovative performance of firms when they are used in combination with other technology sourcing modes.
    • The interplay between target firm R&D, acquirer debt financing and takeover premia

      Mataigne, Virginie; De Maeseneire, Wouter; Luypaert, Mathieu (Applied Economics Letters, 2018)
      The level of acquisition premia is of paramount importance in light of the vast sums paid to target shareholders and the often disappointing returns realized by corporate buyers. In this letter, we focus on the impact of R&D investments by targets on the acquisition premium contingent upon the acquirer's financing choices. Based on a unique hand-collected sample of 407 listed European transactions, we find a positive effect of target R&D on premia paid. Yet, when acquirers finance the acquisition of an R&D intensive target with debt, the positive relation disappears. Consequently, we establish that financing sources affect bidding strategies of acquiring companies in case of difficult-to-value targets.
    • Value Creation in Mergers and Acquisitions: A Study of European Transactions during the Fifth Wave

      Huyghebaert, Nancy; Luypaert, Mathieu (Bank- en Financiewezen, 2009)