The Role of Internal M&A Teams in Takeovers

Review of Finance, forthcoming

53 Pages Posted: 14 Mar 2018 Last revised: 27 Oct 2020

See all articles by Nihat Aktas

Nihat Aktas

WHU - Otto Beisheim School of Management

Audra L. Boone

Texas Christian University - M.J. Neeley School of Business; European Corporate Governance Institute (ECGI)

Alexander Witkowski

WHU - Otto Beisheim School of Management

Guosong Xu

Rotterdam School of Management, Erasmus University

B. Burcin Yurtoglu

WHU - Otto Beisheim School of Management

Date Written: October 26, 2020

Abstract

This paper provides insights into the inner workings of internal corporate M&A teams using survey evidence from 65 firms from Austria, Germany, and Switzerland. We find that internal teams create value, especially relative to external advisors, by directing transaction rationales, screening targets, and employing performance metrics to assess post-merger success. Teams emphasizing economic rationales as a merger motive are associated with higher returns than those teams more apt to consider behavioral motives. We consider several team characteristics and find that financial experience is the most persistent and significant attribute in explaining the outcomes across various deal stages. Another key result from our survey-based evidence is that latent M&A team factors explain approximately 54% of the acquirer fixed effects in announcement return regressions.

Keywords: Mergers and acquisitions, Internal M&A teams, Financial advisors, Takeover process, Acquirer returns

JEL Classification: G14, G34

Suggested Citation

Aktas, Nihat and Boone, Audra and Witkowski, Alexander and Xu, Guosong and Yurtoglu, B. Burcin, The Role of Internal M&A Teams in Takeovers (October 26, 2020). Review of Finance, forthcoming, Available at SSRN: https://ssrn.com/abstract=3140400 or http://dx.doi.org/10.2139/ssrn.3140400

Nihat Aktas (Contact Author)

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

Audra Boone

Texas Christian University - M.J. Neeley School of Business ( email )

Fort Worth, TX 76129
United States

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Alexander Witkowski

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

Guosong Xu

Rotterdam School of Management, Erasmus University ( email )

Rotterdam
Netherlands

B. Burcin Yurtoglu

WHU - Otto Beisheim School of Management ( email )

Chair of Corporate Finance
Burgplatz 2
Vallendar, 56179
Germany
+49 261 6509-721 (Phone)
+49 261 6509-729 (Fax)

HOME PAGE: http://www.whu.edu/forschung/fakultaet/finance-group/corporate-finance/

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