Why some acquisitions take longer to close: target stakeholder relationships and time compression diseconomies

Purpose This study aims to examine how target stakeholder networks, specifically alliances, venture capital backing and public ownership, shape the duration of the acquisition closing process. We focus on why some acquisitions take longer to close by highlighting the stakeholder complexity embedded in target firms. Design/methodology/approach Drawing on time compression diseconomies (TCD) theory, we develop hypotheses linking target stakeholder networks to closing delays and test them using a sample of USA biotechnology and pharmaceutical acquisitions. We employ Poisson regression models to examine how different forms of target stakeholder complexity influence time to close and whether prior ties between acquirers and targets moderate these relationships. Findings The results show that targets with more extensive stakeholder networks take significantly longer to close. Alliances, venture capital backing and public ownership each increase time to close by amplifying coordination demands, information-processing burdens and negotiation complexity. Prior ties between acquirers and targets mitigate some of these delays, suggesting that relational familiarity can reduce uncertainty and coordination frictions during the closing period. Originality/value This study advances mergers and acquisitions (M&A) research by examining acquisition closing time as a strategically meaningful outcome rather than a purely administrative delay. By extending TCD theory to the acquisition closing period, we identify target-side stakeholder complexity as a key driver of closing delays and show how prior relationships can offset time compression costs. In doing so, we offer a process-oriented perspective on M&A execution and demonstrate the value of TCD for understanding time-sensitive strategic transactions.