Mathieu Luypaert

Value creation and division of gains in horizontal acquisitions in Europe: the role of industry conditions

In this article, we empirically investigate the industry determinants of value creation through Mergers and Acquisitions (M&A) and the division of M&A gains for a sample of horizontal acquisitions in Europe during the period 1997–2008. We calculate the combined abnormal return around deal announcement to proxy for M&A value creation. Our results show that industry sales concentration and the ratio of the combined target and bidder size relative to the minimum efficient scale in the corresponding industry are significantly negatively associated with M&A value creation. The relation between industry sales growth and M&A gains is U-shaped. The extent of foreign competition within the industry, industry technological intensity and industry deregulation bear no significant association with M&A wealth effects, however. Finally, the data reveal that the division of M&A gains between target and bidder investors is determined by firm and deal characteristics rather than by industry conditions.

Financial statement filing lags: An empirical analysis among small firms

This article examines financial statement filing lags among a sample of Belgian small firms. Our results indicate that around one-third of small firm financial statements are filed late (after the legal deadline), but that monetary sanctions could be an effective tool to encourage compliance with legal deadlines. Whereas the deadline and late filing sanctions are filing incentives, various factors, such as firm size and presence of an external financial statement audit, also affect financial statement filing lags. Evidence indicated that extremely late filings were associated with lower financial statement quality.

Antecedents of time to completion in mergers and acquisitions

Literature on mergers and acquisitions (M&As) performance and wealth effects is abundant. Yet, we know very little about the pre-completion stage, in particular about aspects such as the likelihood of deal closing and time to completion. Understanding the drivers of completion time is however important as prolonged deal duration is costly and postpones realizing synergy gains. In this article, we study the antecedents of deal duration for a sample of 1150 M&As between listed US companies during 1994–2011. Not surprisingly, deal complexity critically affects time to completion. Stock offers, deal hostility, mergers and larger deals are characterized by a lengthier acquisition duration. Strong and clear shareholder support accelerates deal completion, as does the likelihood of overpayment. Finally, experienced bidders succeed in more rapidly completing transactions, implying learning effects.

The interplay between target firm R&D, acquirer debt financing and takeover premia

ABSTRACT The level of acquisition premia is of paramount importance in light of the vast sums paid to target shareholders and the often disappointing returns realized by corporate buyers. In this letter, we focus on the impact of R&D investments by targets on the acquisition premium contingent upon the acquirer’s financing choices. Based on a unique hand-collected sample of 407 listed European transactions, we find a positive effect of target R&D on premia paid. Yet, when acquirers finance the acquisition of an R&D intensive target with debt, the positive relation disappears. Consequently, we establish that financing sources affect bidding strategies of acquiring companies in case of difficult-to-value targets.