Padma Rao Sahib

Completion or abandonment of mergers and acquisitions: Evidence from the newspaper industry, 1981-2000

Regulatory and technological changes have resulted in a surge in merger and acquisition (M&A) activity in the newspaper industry since the 1980s. This study investigates the “success” of these activities focusing on a particular facet of acquisition performance. We study the completion likelihood of an announced transaction, using a sample of M&A announcements from the newspaper industry (1981–2000). Results show that although firm-level characteristics are relevant, transaction-specific and regulatory factors are even more important. Not surprisingly, the attitude of the transaction—whether hostile or friendly—is a key factor, as are the method of payment and the percentage of control sought by the acquirer. The latter in particular reaffirms the prevailing view on the importance of regulatory influences on media M&As.

Putting your best cyber identity forward - An analysis of 'Success Stories' from a Russian Internet marriage agency

This article analyses the profiles of a sample of Russian women seeking partners from western countries collected from the website of an Internet marriage agency. The popular viewpoint is that such women, in possible collusion with the agency, use the anonymity of the Internet to create an image of a perfect partner for a western male. Taking the information at face value, the article compares single women seeking partners to women featured in a ‘Success Stories’ section. The study finds that although most of the self-reported information is not significantly different across the two groups, women from major cities (which are the locations of ‘romance tours’) are twice as likely to be successful. Surprisingly, standard factors valued in marriage markets do not matter. The findings are interpreted as evidence of the importance of face-to-face meetings and as partial support for the authenticity of the data included in the profiles.

As Good as Married? A Model of Premarital Cohabitation and Learning

This article develops a two-sided search-matching model with imperfectly observed types and sequential learning. We use the metaphor of premarital cohabitation and assume that it is initiated to learn more about ones prospective spouse. We show that couples match within classes and that the classes of cohabiting and married couples partially overlap. Couples are more discriminating about whom they marry than whom they cohabit with. We demonstrate that cohabiting individuals eventually learn each others true type. We show that sequential learning during cohabitation reduces signaling errors and that the Bayes estimator of true type converges almost surely to true type. As noisy information is filtered over time, the risk of mismatch disappears and the aggregate matching pattern based on true types is restored.

THE EFFECT OF ACQUISITION EXPERIENCE, INSTITUTIONAL CONTEXT AND NATIONAL CULTURE ON CROSS-BORDER MERGER ABANDONMENT AND COMPLETION.

In this study, we offer a first attempt to explain two phenomena that, to the best of our knowledge, were ignored in the literature: (a) the likelihood that an announced M&A deal will be abandoned ...

Cross-border M&As in Related and Technology-intensive Industries : Evidence on the Dynamics of Spatial Distance, Industry Context, and Completion Likelihood of International Takeovers

Many announced cross-border mergers and acquisitions (M&As) are never brought to completion despite potential negative consequences to acquirers and targets. This paper presented evidence on the dynamic effects of spatial distance and two industry-level characteristics, namely industry relatedness between the two firms and technological intensity, on the completion likelihood of cross-border M&A deals. Based on a sample of 8,489 M&A transactions we found that the completion likelihood of cross-border M&As increases with spatial distance. The effect is more pronounced for deals across technology-based industries, evidence for related deals is inconclusive.

The role of timing in a merger wave on overcoming challenges in the M&A pre-merger process

This paper investigates two important issues in the pre-merger process, namely the probability to complete an announced M&A deal and the time needed to complete the process. First, through a content analysis of the 150 largest abandoned announced M&A deals between 2000 and 2010, we demonstrate that defense from the target, competing bidders, regulatory concerns, and acquirer opposition are major roadblocks that firms might face during the pre- merger process. Moreover, these hurdles can jointly occur, creating cumulative difficulties for firms and managers in completing the deal. Second, we suggest that these roadblocks might vary depending on the timing of an M&A announcement in a merger wave. Therefore, the likelihood of completing an announced M&A deal and the duration of the pre-merger process can be affected by the timing of the transaction in the wave. With a sample of 2,802 announced M&As across four industry waves, we find that the sooner an M&A deal is announced in a merger wave, the higher the likelihood that the deal will be completed. Moreover, our analyses indicate that acquisition deals announced late in a wave experience a longer pre- merger deal-making process.

Learning from Prior Restructuring Activities to Make Acquisitions in an M&A Wave

We develop theory and hypotheses on how a firm learns from both acquisitions and divestitures to complete a new acquisition deal. In addition, we examine how knowledge transfer due to prior experience is influenced by the timing of an acquisition attempt in a merger wave. As far as learning from prior acquisition deal-making is concerned, we apply standard arguments from organizational learning theory. Moreover, drawing arguments from vicarious observational learning theory, we suggest that firms can learn about how to strike an acquisition deal through observing the deal-making process from the other side of the transaction – i.e., through a divestiture. Finally, we argue that learning from prior experience can be moderated by the timing of the acquisition attempt in the wave, as firms and managers feel the pressure of information cascades in later stages of the wave. We test our hypotheses in the context of the pre-integration process with a sample of 3,984 M&A transactions in six industry waves. Empiri...

Slow but certain: The pre-M&A process of European national champion deals

This study investigates the effect of national champion strategies on the length of the pre-M&A process in Europe. The policy strategy of creating so-called “national champions,” that is, promoting national rather than international mergers, is often the focus of European policy debate. If European governments support national champion M&A activities, we would expect that national champion M&A deals have an accelerated pre-M&A process at the European Commission (EU) relative to comparable European M&A deals. To empirically test this proposition, we compare national champion M&A under scrutiny by the EU to similar deals in terms of industry and firm characteristics in the period 1997–2010. In contrast to our expectation, national champion M&As face a longer pre-M&A process than other comparable European M&As. However, evidence indicates that national champion M&As are almost always completed successfully while comparable European M&As are often derailed in process.

Investigating the Effect of the Optimality Constraint on Parameter Estimates in a Job Search Model

In a standard job search model, an unemployed worker maximizes the expected present discounted value of his income stream while facing a stationary environment. It can be shown that the optimal policy for the worker to follow is a reservation wage policy. This involves the worker accepting wages above a certain cut-off wage called the reservation wage and rejecting others. The implicit equation defining this reservation wage is termed the optimality constraint in the job search literature. The optimality constraint implies a specific relationship between the reservation wage, the arrival rate of offers, the wage distribution, the discount rate and the unemployment benefit. The goal of this paper is to study the effect of the imposition of the optimality constraint in a simple job search model. I compare estimates of parameters obtained when the optimality constraint is imposed to those obtained when the constraint is not imposed. This constraint is also tested for a given set of data. Although it is difficult to impose, this constraint has been used to identify the parameters of a job search model. Some studies, including Lancaster and Chesher(1988) use the optimality constraint to deduce the effect of the unemployment benefit on the reservation wage and the mean duration of unemployment. Studies that do not use the optimality constraint often assume that the reservation wage is a linear function of explanatory variables and deduce elasticities using a regression approach as in Ehrenberg and Oaxaca(1976). Studies so far do not compare parameters estimates obtained with and without the optimality constraint, which is the contribution of my paper.