Suchergebnisse

Derived from Kluwer's multi-volume 'Corporate Acquisitions and Mergers', this work provides a concise, practical analysis of current law and practice relating to mergers and acquisitions of public and private companies in Canada. The book offers a clear explanation of each step in the acquisition process from the perspectives of both the purchaser and the seller. Key areas covered include: structuring the transaction; due diligence; contractual protection; consideration; and the impact of applicable company, competition, tax, intellectual property, environmental and data protection law on the acquisition process

This study investigates a problem that may occur during corporate acquisitions: managers who become committed to acquiring a particular target firm, regardless of benefit to the acquiring firm. Three factors that may create commitment to a particular target were investigated: (1) personal responsibility for the decision to acquire the target, (2) competition for the target, and (3) whether the decision to acquire the target is public. These factors were varied in a simulated corporate acquisition where participants began an acquisition and then were given negative information about the target. They were later given the choice of continuing with the acquisition or withdrawing and investing elsewhere. As predicted, personal responsibility for the decision to acquire the target, competition for the target, and a public decision context all increased participants' commitment to acquiring the target, despite the negative information. Participant work and acquisition experience did not affect these results. Field studies of acquisitions suggest that commitment to acquiring a specific target occurs during the acquisition process. Since the acquisition process is a potentially important determinant of acquisition outcomes, commitment to targets has negative implications for these outcomes. This study adds a systematic empirical investigation of the determinants of commitment in acquisition situations. Studies in nonacquisition settings have demonstrated that personal responsibility affects commitment. However, the presence of competition has not previously been studied, and a public decision context has only been studied in a limited way. These are important factors in generating commitment to acquisitions. These results suggest that managers should recognize that overcommitment can and does occur during acquisitions. Further, the factors that cause overcommitment to targets have implications for managers who wish to avoid this commitment. Activities that should help avoid overcommitment problems include assigning target choice and due diligence activities to different individuals, and limiting news of impending acquisitions.

AbstractResearch Question/IssueWe examine whether bond‐blockholders provide additional, distinct monitoring roles in merger and acquisition (M&A) processes beyond those of equity‐blockholders. Using a sample of 4309 M&A deals reported between 2001 and 2010, we shed new light on the monitoring spillover effects of bondholders to shareholders in the context of M&As.Research Findings/InsightsOur findings demonstrate a positive relationship between the presence of bond‐blockholders (or a change in their position) and acquiring firms' abnormal return announcements, which supports the monitoring spillover effects from bondholders to shareholders in M&A processes. Our subsample analyses indicate that bond‐blockholders are better monitors of (1) overconfident CEOs engaging in M&As, (2) CEOs exhibiting risk‐taking behavior in M&As, and (3) entrenched managers participating in M&As. Moreover, we discover a positive association between the previous quarter's changes in "monitoring" bond‐blockholders' positions and the acquiring firms' 3‐day cumulative abnormal returns (CARs).Theoretical/Academic ImplicationsIn corporate finance literature, equity‐blockholders have long been recognized as effective monitors. Despite the importance of debt as most firms' primary funding source, the benefits of debt for monitoring the efficiency of managers and their organizations have been largely overlooked in the existing literature. Thus, this study provides evidence on the additional and distinct monitoring roles of bond‐blockholders beyond those of equity‐blockholders in M&A processes and the impact of bond‐blockholders on shareholders' wealth around M&A announcements.Practitioner/Policy ImplicationsThis study offers insights to policymakers interested in enhancing the legitimacy of corporate governance on the monitoring spillover effects of bondholders to shareholders in the context of M&As. In addition, our findings suggest that bondholders can have a long‐term perspective beyond the limited time horizon of bond maturity and influence M&A processes positively. Thus, this study has significant implications for managers and practitioners interested in which investors positively affect M&As.