References (32)


Citations (4)



Industry Expertise, Information Leakage, and the Choice of M&A Advisors

Xin (Simba) Chang

Nanyang Business School

Chander Shekhar

University of Melbourne; Financial Research Network (FIRN)

Lewis Tam

University of Macau

Jiaquan Yao

Xiamen University

February 15, 2015

24th Australasian Finance and Banking Conference 2011 Paper

This paper examines the impacts of M&A advisors’ industry expertise on firms’ choice of advisors in mergers and acquisitions. We show that an investment bank's expertise in merger parties’ industries increases its likelihood of being chosen as an advisor, especially when the acquisition is more complex, and when a firm in M&A has less information about the merger counterparty. However, due to the concerns about information leakage to industry rivals through M&A advisors, acquirers are reluctant to share advisors with rival firms in the same industry, and they are more likely to switch to new advisors if their former advisors have advisory relationship with their industry rivals. In addition, we document that advisors with more industry expertise earn higher advisory fees and increase the likelihood of deal completion.

Number of Pages in PDF File: 48

Keywords: Investment banking; Mergers and Acquisitions; Advisory Fees; Advisory Services; Industry Expertise

JEL Classification: G24, G34, L11

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Date posted: August 20, 2011 ; Last revised: February 16, 2015

Suggested Citation

Chang, Xin (Simba) and Shekhar, Chander and Tam, Lewis and Yao, Jiaquan, Industry Expertise, Information Leakage, and the Choice of M&A Advisors (February 15, 2015). 24th Australasian Finance and Banking Conference 2011 Paper. Available at SSRN: http://ssrn.com/abstract=1913001 or http://dx.doi.org/10.2139/ssrn.1913001

Contact Information

Xin Chang
Nanyang Business School ( email )
S3-B1B-76 Nanyang Avenue
Singapore, 639798
HOME PAGE: http://www.ntu.edu.sg/home/changxin
Chander Shekhar
University of Melbourne ( email )
Melbourne, Victoria 3010
Financial Research Network (FIRN)
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
HOME PAGE: http://www.firn.org.au

Lewis Tam
University of Macau ( email )
Jiaquan Yao (Contact Author)
Xiamen University ( email )
Xiamen, Fujian 361005
Feedback to SSRN

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References:  32
Citations:  4

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