Do investors value the acquirers’ complexity in a merger and acquisition?
Our study explores the extent to which investors consider acquirers' complexity in evaluating the performance of mergers and acquisitions (M&A). We examined 1820 M&As in the US between 2002 and 2017 and found that acquirer complexity negatively impacts acquirer announcement returns. Higher levels of acquirer complexity diminish the synergy effect of acquisitions. Furthermore, our evidence suggests that this relationship is more pronounced when the acquiring firm has weaker corporate governance, lower compensation incentives, or more information asymmetry. Our study contributes to the M&A literature by highlighting the significance of acquirers' corporate structure on their M&A performance.
Authors
- Ying Pan (ORCID: https://orcid.org/0000-0002-8744-6931)
- Dien Giau Bui (ORCID: https://orcid.org/0000-0002-7677-0701)
- Ngoc Thuy (ORCID: https://orcid.org/0009-0004-8297-1886)
- Nguyen Nhut Vu Truong
- Ruihai Li (ORCID: https://orcid.org/0000-0003-1916-7452)
Institutions
- FPT University (VN)
- Harbin University (CN)
- Shanghai Lixin University of Accounting and Finance (CN)
- National Yang Ming Chiao Tung University (TW)
- Yuan Ze University (TW)
Publication Details
- Journal
- International Review of Economics & Finance
- Published
- 2025-02-26
- DOI
- https://doi.org/10.1016/j.iref.2025.103985
- Citations
- 1
- Primary Topic
- Corporate Finance and Governance
- Type
- article
- Field-Weighted Citation Impact
- 3.91