Journal of Banking & Finance Vol. 50 2015
The impact of institutional investors on mergers and acquisitions in the United Kingdom
Abstract
In this paper we investigate the impact of institutional ownership on UK mergers and acquisitions. We employ a comprehensive sample of M&As conducted by UK acquirers from 2000 to 2010, thus including a full cycle of peak and trough in M&A waves. We find that institutional investors increase the likelihood of an M&A to be a large, cross-border deal, opting for full control. Moreover, institutional ownership concentration and foreign institutional ownership increase the likelihood of cross-border M&As. In addition, we assess the influence of institutional shareholders’ investment horizon and find that while investment horizon have a negative influence in encouraging cross-border M&As, the presence of long-term investors encourages larger M&As. Finally, even after controlling for the 2007–08 financial crisis the market reacts negatively to the announcement of cross-border M&As.
- DOI
- 10.1016/j.jbankfin.2014.06.004
- Volume
- 50
- Pages
- 547-561
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref