The Private Deal Process in Mergers and Acquisitions

27 Pages Posted: 7 Jun 2022 Last revised: 17 Feb 2023

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)

Date Written: February 17, 2023

Abstract

The purpose of this study is to review the nascent literature devoted to the private component of the takeover process. Numerous important contributions have opened the black box of merger negotiations using unique data, such as the merger background in mandated filings and survey of M&A practitioners and contributed to our understanding of the takeover process. This article is organized in three parts: (i) we first focus on the drivers of deal initiation and acquirer-target matching; (ii) then, we examine the role played by internal M&A teams and external advisors in executing the takeover process; (iii) and finally, we explore the drivers of the sales method. The insights gleaned from this literature review can be summarized as follows: targets are not passive during the initiation phase; the takeover process is more competitive than what early studies have suggested and most of the competition takes place privately; acquisitive firms often rely on internal M&A teams to implement the process.

Keywords: private deal process, auction, negotiation, internal teams, external advisors, merger performance

JEL Classification: G34

Suggested Citation

Aktas, Nihat and Boone, Audra, The Private Deal Process in Mergers and Acquisitions (February 17, 2023). Available at SSRN: https://ssrn.com/abstract=4126431 or http://dx.doi.org/10.2139/ssrn.4126431

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

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