The Effects of Information Acquisition on Mergers and Acquisitions: Evidence from SEC EDGAR Web Traffic
63 Pages Posted: 2 Jul 2021 Last revised: 15 Sep 2022
Date Written: September 14, 2022
Abstract
I use SEC EDGAR web traffic as a proxy for information acquisition to study its effects on market reactions to mergers and acquisitions (M&As). Information acquisition about merging firms, industry rivals, and supply-chain firms enhances market informativeness about merger operating synergies. The effects are more pronounced among M&As with more institutional downloads and higher institutional trading activity. Furthermore, information acquisition about merging firms improves the market’s assessment of financial synergies. In addition, non-deal firms with greater information acquisition activity experience an increase in subsequent takeover probability. Overall, this paper demonstrates that information acquisition improves the market’s assessment of value creation in M&As.
Keywords: information acquisition, stock market reaction, market efficiency, mergers and acquisitions
JEL Classification: G14, D81, G34
Suggested Citation: Suggested Citation