Journal of Financial and Quantitative Analysis Vol. 51 No. 1 2016

CEO Narcissism and the Takeover Process: From Private Initiation to Deal Completion

Nihat Aktas^1,2,3; Eric de Bodt; Helen Bollaert^1,2,3; Richard Roll⁴

¹ SKEMA Business School · ² Université de Lille · ³ Université Lille Nord de France · ⁴ UCLA Anderson, 110 Westwood Plaza, Los Angeles, CA 90095-1481, USA

Abstract

Chief executive officer (CEO) narcissism affects the takeover process. Acquirer shareholders react less favorably to a takeover announcement when the target CEO is more narcissistic. Narcissistic acquiring CEOs negotiate faster. They are also marginally more likely to initiate deals. Acquirer CEO narcissism and target CEO narcissism are associated with a lower probability of deal completion and reduce the likelihood that the target CEO will be employed by the merged firm. Our findings highlight the importance of both acquirer and target CEO psychological characteristics throughout the takeover process.

DOI

10.1017/s0022109016000065

Volume

51

Issue

1

Pages

113-137

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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