Accounting Firms in the European M&A Advisory Market

British Journal of Management, forthcoming

67 Pages Posted: 27 Nov 2015 Last revised: 11 Nov 2021

See all articles by Pawel Bilinski

Pawel Bilinski

Bayes Business School, City University London

Andrew Yim

Bayes Business School, City, University of London

Date Written: October 14, 2021

Abstract

Building on the knowledge-based view of the resource-based theory, we propose that accounting firms leverage the industry expertise acquired from the audits of the targets’ industries to produce fairer target valuations on merger and acquisitions (M&As). The accounting expertise competitive advantage explains why bidders choose accounting firms, rather than investment banks, to advise on transactions where the likelihood of overpaying for a target is high. We document that for such deals, acquirer announcement returns are higher and offer premia are lower if the bidders are advised by accounting firms that are audit specialists in the targets’ industries. Our results explain why accounting firms are listed among top ten M&A financial advisors in the European Thomson Reuters and Mergermarket league tables.

Keywords: accounting firms, financial advisors, hard-to-value targets, mergers and acquisitions, knowledge-based view, resource-based theory

JEL Classification: G34, M41, M49

Suggested Citation

Bilinski, Pawel and Yim, Andrew, Accounting Firms in the European M&A Advisory Market (October 14, 2021). British Journal of Management, forthcoming, Available at SSRN: https://ssrn.com/abstract=2695819 or http://dx.doi.org/10.2139/ssrn.2695819

Pawel Bilinski (Contact Author)

Bayes Business School, City University London ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Andrew Yim

Bayes Business School, City, University of London ( email )

Faculty of Finance
106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

HOME PAGE: http://www.bayes.city.ac.uk/faculties-and-research/experts/andrew-yim

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