Journal of Financial and Quantitative Analysis Vol. 52 No. 2 2017
Policy Uncertainty and Mergers and Acquisitions
Abstract
This research examines the relationship between policy uncertainty and mergers and acquisitions (M&As). We find that policy uncertainty is negatively related to firm acquisitiveness and positively related to the time it takes to complete M&A deals. In addition, policy uncertainty motivates acquirers to use stock for payment and to pay lower bid premiums. Acquirers, on average, create larger shareholder value from M&A deals undertaken during periods of high policy uncertainty, which is attributable to their prudence as well as the wealth transfer from the financially constrained targets to acquirers.
- DOI
- 10.1017/s0022109017000175
- Volume
- 52
- Issue
- 2
- Pages
- 613-644
- Language
- en
- Sources
- openalex bibtex:phds-export.bib crossref