Asubstantive body of theory and research on the role of culture in mergers and acquisitions (M&A) suggests that cultural differences can create major obstacles to achieving integration benefits. ...However, the opposite view—that differences in culture between merging firms can be a source of value creation and learning—has also been advanced and empirically supported. In an attempt to reconcile these conflicting perspectives and findings, we present a model that synthesizes our current understanding of the role of culture in M&A, and we develop a set of hypotheses regarding mechanisms through which cultural differences affect M&A performance. The results of a meta-analysis of 46 studies, with a combined sample size of 10,710 M&A, suggest that cultural differences affect sociocultural integration, synergy realization, and shareholder value in different, and sometimes opposing, ways. Moderator analyses reveal that the effects of cultural differences vary depending on the degree of relatedness and the dimensions of cultural differences separating the merging firms, as well as on research design and sample characteristics. The implications for M&A research and practice are discussed.
While cross-border mergers and acquisitions (M&As) involving emerging markets have been increasing in recent years, a high percentage collapse before completion. This study investigates how the ...predictors of cross-border M&A completion involving emerging markets depend upon the direction of global expansion, i.e., investment inbound to a developing market or outbound from a developing market. Analysis based on 15 years of data from four emerging economies, Brazil, Russia, India, and China, from 1995 to 2010, reveals fundamental differences in the predictors of inbound vs. outbound M&A completion. Country-level factors reflecting differences in political, trade, and legal environments strongly affect the completion for inbound M&As, but have a much weaker influence on outbound M&As. By contrast, firm-level factors such as past M&A experience have a significantly stronger effect on completion for outbound than for inbound M&As. Most interestingly, two deal-level factors (the percentage of stake sought by the acquirer and whether or not the deal is a cash transaction) increase the likelihood of completion for inbound but decrease it for outbound M&As. These findings have important managerial implications for enhancing the success of global expansions.
Based on Chinese firm-level panel data in energy and electric power industries from year 2007 to 2018, we adopt panel data OLS regression model to empirically study the impact of geopolitical risk ...(GPR) on mergers and acquisitions (M&A). We find that GPR significantly promotes M & A, and GPR significantly positively affects M & A through possible mechanisms of real option and prospect synergy effect. Further researches indicate that debt ratio and ownership property attenuate the positive influence of GPR on M&A. Instrumental variable and other robustness tests still stand on our results.
•Geopolitical risk (GPR) significantly promotes mergers and acquisitions in energy and electric power industries.•GPR significantly positively affect M & A through possible mechanisms of real option and prospect synergy effect.•Debt ratio attenuates the positive influence of geopolitical risk on mergers and acquisitions.•Ownership property attenuates the positive influence of geopolitical risk on mergers and acquisitions.
ABSTRACT
We report the results of optical follow-up observations of 29 gravitational-wave (GW) triggers during the first half of the LIGO–Virgo Collaboration (LVC) O3 run with the Gravitational-wave ...Optical Transient Observer (GOTO) in its prototype 4-telescope configuration (GOTO-4). While no viable electromagnetic (EM) counterpart candidate was identified, we estimate our 3D (volumetric) coverage using test light curves of on- and off-axis gamma-ray bursts and kilonovae. In cases where the source region was observable immediately, GOTO-4 was able to respond to a GW alert in less than a minute. The average time of first observation was 8.79 h after receiving an alert (9.90 h after trigger). A mean of 732.3 square degrees were tiled per event, representing on average 45.3 per cent of the LVC probability map, or 70.3 per cent of the observable probability. This coverage will further improve as the facility scales up alongside the localization performance of the evolving GW detector network. Even in its 4-telescope prototype configuration, GOTO is capable of detecting AT2017gfo-like kilonovae beyond 200 Mpc in favourable observing conditions. We cannot currently place meaningful EM limits on the population of distant ($\hat{D}_L = 1.3$ Gpc) binary black hole mergers because our test models are too faint to recover at this distance. However, as GOTO is upgraded towards its full 32-telescope, 2 node (La Palma & Australia) configuration, it is expected to be sufficiently sensitive to cover the predicted O4 binary neutron star merger volume, and will be able to respond to both northern and southern triggers.
This paper studies government reactions to large corporate merger attempts in the European Union during 1997 to 2006 using hand-collected data. We document widespread economic nationalism in which ...the government prefers that target companies remain domestically owned rather than foreign-owned. This preference is stronger in times and countries with strong far-right parties and weak governments. Nationalist government reactions have both direct and indirect economic impacts on mergers. In particular, these reactions not only affect the outcome of the mergers that they target but also deter foreign companies from bidding for other companies in that country in the future.
We examine the effect of directors' and officers' liability insurance (D&O insurance) on the outcomes of merger and acquisition (M&A) decisions. We find that acquirers whose executives have a higher ...level of D&O insurance coverage experience significantly lower announcement-period abnormal stock returns. Further analyses suggest that acquirers with a higher level of D&O insurance protection tend to pay higher acquisition premiums and their acquisitions appear to exhibit lower synergies. The evidence provides support for the notion that the provision of D&O insurance can induce unintended moral hazard by shielding directors and officers from the discipline of shareholder litigation.
If a teaching hospital loses funding, what is the next option? Mergers of Teaching Hospitals in Boston, New York, and Northern California investigates the recent mergers of six of the nation's most ...respected teaching hospitals. The author explains the reasons why these institutions decided to change their governance and the factors that have allowed two of them to continue to operate while forcing the third to dissolve after only 23 months of operation. The case studies contained within this book rely on an impressive amount of research. Notably, instead of citing only published articles and books, the author includes information from numerous, extensive personal interviews with key participants in the various mergers. With this research the author not only presents to the reader a picture of why these mergers came about, but also investigates how the organizations have fared since joining together. The mergers are analyzed and compared in order to identify various methods of merger formation as well as ways in which other newly formed hospitals might accomplish a variety of important goals. Offering a spectacular account of some of the mergers that occurred in the health care field at the close of the twentieth century, these stories provide insight into academia's relationship with teaching hospitals and the challenges involved in bringing prestigious and powerful medical institutions together. The institutions discussed are Partners, the corporation which includes the Massachusetts General Hospital and the Brigham and Women's Hospital, New York-Presbyterian Hospital, the union of the New York and Presbyterian hospitals in New York City, and the UCSF Stanford, the merged teaching hospitals of the University of California, San Francisco and Stanford. This book will particularly appeal to professionals and academics interested in medicine, business, and organizational studies.
Mergers and acquisitions have gained a significant position in the corporate landscape in India. While this is so, the law relating to this field is still at its nascent stage, facing several ...emerging challenges. This collection of papers, selected pursuant to the NLIU Trilegal Summit on Mergers and Acquisitions, 2018, highlights some of these challenges, bringing to the fore the inter-relationship between mergers and acquisitions and other areas such as anti-trust, taxation, foreign direct investment, and insolvency. An endeavour of National Law Institute University, Bhopal, India, this work serves as a guide to both students and practitioners working in the area of mergers and acquisitions at a time when India is being looked at as a favourable investment destination.
To test recent theories suggesting that valuation errors affect merger activity, we develop a decomposition that breaks the market-to-book ratio (
M
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B
) into three components: the firm-specific ...pricing deviation from short-run industry pricing; sector-wide, short-run deviations from firms’ long-run pricing; and long-run pricing to book. We find strong support for recent theories by Rhodes-Kropf and Viswanathan 2004. Market valuation and merger waves. Journal of Finance, forthcoming and Shleifer and Vishny 2003. Stock market driven acquisitions. Journal of Financial Economics 70, 295–311, which predict that misvaluation drives mergers. So much of the behavior of
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B
is driven by firm-specific deviations from short-run industry pricing, that long-run components of
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B
run counter to the conventional wisdom:
Low long-run value to book firms buy
high long-run value-to-book firms. Misvaluation affects who buys whom, as well as method of payment, and combines with neoclassical explanations to explain aggregate merger activity.
We find that the acquirer's (1) abnormal returns at merger and acquisition (M&A) announcements and (2) long-term abnormal returns after acquisitions increase with target firm insiders’ net purchase ...ratios. Further, acquisition synergies, measured as the (1) acquirer-target combined cumulative abnormal returns at M&A announcements and (2) changes in three-year operating performance after acquisitions, increase with target insider net purchase ratios. Notwithstanding, targets with higher insider net purchase ratios receive higher takeover premiums. Overall, our findings suggest that, even under the SEC's “short-swing rule,” target insider trading prior to the M&A announcement serves as a credible signal for acquisition outcomes.
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