Prior Relationship, Information Leakage, and the Choice of M&A Advisor
This study examines the impact of prior bank-firm relationship and information leakage concern on the acquirers’ choice of financial advisors in mergers and acquisitions. Using the sample including 856 merger deals announced during the period January 1995 to December 2004 that involved public U.S. firms, we show that the previous underwriting and M&A advisory relationships increase the likelihood of being chosen to advise a particular M&A deal. Large firms are found to avoid sharing the same banks with their product-market rivals, where strategically valuable information is at the risk of flowing to rivals through various services provided by the investment banks. We also find that M&A advisors are less likely to be chosen by the acquirers when the advisors previously represented the current targets in M&A deals. Taken together, our results suggest that informational frictions create a constraint on M&A advisory services competition.
Investment banking Mergers and Acquisitions Competition Advisory Services
Xin Chang Chander Shekhar Lewis H.K. Tam Amy Zhu
Department of Finance, Faculty of Economics and Commerce, University of Melbourne, Australia Faculty of Business Administration, University of Macau, Macau, China
国际会议
成都
英文
1-36
2007-07-09（万方平台首次上网日期，不代表论文的发表时间）