Publication Type
Journal Article
Version
publishedVersion
Publication Date
3-2017
Abstract
Extending research on the effect of experience on acquisition outcomes, we examine how the differential in previous M&A experience between the target and the acquirer affects the value they, respectively, obtain when the acquirer takes over the target. Drawing on literature about organizational learning, negotiation, and information economics, we theorize that the party with greater experience will be able to obtain more value. Furthermore, we theorize that the effect of differential M&A experience on value obtained is contingent on the level of information asymmetry the acquirer faces with respect to the target, specifically as a function of the target's product-market scope and whether the deal is friendly. We test and find support for these predictions in a sample of 1,241 M&As over a 30-year period.
Keywords
acquisition target, bargaining, experience advantage, M&A performance, product-market scope, mergers and acquisitions
Discipline
Strategic Management Policy
Research Areas
Strategy and Organisation
Publication
Strategic Management Journal
Volume
38
Issue
1
First Page
609
Last Page
625
ISSN
0143-2095
Identifier
10.1002/smj.2502
Publisher
Wiley
Citation
CUYPERS, Ilya R. P.; CUYPERS, Youtha; and MARTIN, Xavier.
When the target may know better: Effects of experience and information asymmetries on value from mergers and acquisitions. (2017). Strategic Management Journal. 38, (1), 609-625.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/5037
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.
Additional URL
https://doi.org/10.1002/smj.2502