Merger waves,entry-timing,and cross-border acquisition completion: A frictional lens perspective |
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Authors: | Mohammad Fuad Ajai S Gaur |
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Institution: | 1. Indian Institute of Management Lucknow, Prabandh Nagar, IIM Road, Lucknow, 226013, India;2. Rutgers Business School – Newark and New Brunswick, 1 Washington Park, Room 1098, Newark, NJ, 07102, USA |
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Abstract: | We study the impact of deal announcement and entry-timing within a cross-border acquisition (CBA) wave on the likelihood of acquisition completion. Drawing upon the frictional lens perspective, we identify two types of frictional forces- wave-friction and partner-friction within merger waves. We follow a simulation-based methodology and identify three CBA waves for Indian acquirers between 1995 and 2015. Our findings suggest that acquisition announcement within a merger wave as compared to outside of a wave is negatively related to the likelihood of deal completion. Further, within a merger wave, we find an inverted U-shaped relationship between entry-timing and the likelihood of deal completion. |
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Keywords: | Deal abandonment Entry-timing Cross-border merger and acquisition waves Emerging markets |
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