Tell It Like It Is: Success and the Quality of M&A Deal Announcements

30 Pages Posted: 16 Nov 2017 Last revised: 21 Nov 2017

See all articles by Scott Moeller

Scott Moeller

City, University of London - Cass Business School - Faculty of Finance

Anna Faelten

City University London - Sir John Cass Business School

Jeetesh Singh

City University London - Sir John Cass Business School

Date Written: June 6, 2014

Abstract

Corporate communication during an M&A transaction is one of the biggest challenges for all of the stakeholders involved. This article analyses the importance of communication in M&A deals and its significance in the early stages of the transaction. It discusses the factors associated with the quality of the initial announcement quality and its impact on deal completion and short-term wealth creation by looking at individual elements, such as types of communication and deal, strategic rationale, leadership statements, etc. In summary, the analysis shows that clear proactive communication of the deal before the start of the trading on the day of announcement, with a clearly defined strategic rationale ratified via leadership statements explicitly present in the announcements, aids in deal consummation and shareholders who understand the deal better, thereby providing a better short-term return for the shares of the companies involved than the shares of companies announcing deals who did not adopt such a communications strategy.

Keywords: M&A, Corporate Communications, Deal Success, PR

JEL Classification: G34

Suggested Citation

Moeller, Scott and Faelten, Anna and Singh, Jeetesh, Tell It Like It Is: Success and the Quality of M&A Deal Announcements (June 6, 2014). Available at SSRN: https://ssrn.com/abstract=3070992 or http://dx.doi.org/10.2139/ssrn.3070992

Scott Moeller (Contact Author)

City, University of London - Cass Business School - Faculty of Finance ( email )

106 Bunhill Row
London, EC1Y 8TZ
Great Britain
+44 20 7040 8706 (Phone)
+44 20 7040 5168 (Fax)

HOME PAGE: http://www.cass.city.ac.uk/experts/S.Moeller

Anna Faelten

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Jeetesh Singh

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

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