Post-M&A Performance and Failure: Implications of Time Until Deal Completion

Sustainability. 12(7):2999. https://doi.org/10.3390/su12072999

31 Pages Posted: 23 Jun 2020 Last revised: 8 Oct 2020

See all articles by Ephraim Kwashie Thompson

Ephraim Kwashie Thompson

Seoul National University of Science and Technology

Changki Kim

Korea University

Date Written: April 8, 2020

Abstract

Firm values change substantially between deal announcement and closing, risking renegotiation or termination. For deals that eventually close, does waiting longer to close benefit the acquirer post-M&A? We investigate whether the time that elapses until deal completion is an indicator of post-M&A performance and failure. We find that deals taking an optimum time to implement perform better, supporting the due diligence hypothesis, while taking too long to close is an indication of poor post-M&A performance and subsequent failure, supporting the overdue hypothesis.

Keywords: M&A performance, M&A failure, time until deal completion, due diligence hypothesis, overdue hypothesis

JEL Classification: G34, G33

Suggested Citation

Thompson, Ephraim Kwashie and Kim, Changki, Post-M&A Performance and Failure: Implications of Time Until Deal Completion (April 8, 2020). Sustainability. 12(7):2999. https://doi.org/10.3390/su12072999, Available at SSRN: https://ssrn.com/abstract=3614319

Ephraim Kwashie Thompson

Seoul National University of Science and Technology ( email )

172 Gongreuing 2-dong, Nowon-gu
Seoul, 139-746
Korea, Republic of (South Korea)

Changki Kim (Contact Author)

Korea University

1 Anam-dong 5 ka
Seoul, 136-701
Korea, Republic of (South Korea)

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