DOES DISTANCE MATTER IN MERGERS AND ACQUISITIONS?

In: The journal of financial research: the journal of the Southern Finance Association and the Southwestern Finance Association, Band 40, Heft 1, S. 33-54

Abstract

AbstractUsing a sample of mergers and acquisitions from 1985 to 2014, we examine the impact of proximity between target and acquirer as a measure of information asymmetry. We find geographic distance has a significant impact on acquisitions premiums and time to completion, conditional on the size of the target firm. Small targets receive lower premiums and have a faster time to completion the closer they are to their acquirer. Conversely, large targets have a slower time to deal completion the closer their proximity. We conclude geographic distance has a substantial impact on acquisitions.