What Goes Wrong in M&As? On the Long-Run Success Factors in M&As

What Goes Wrong in M&As? On the Long-Run Success Factors in M&As

Luc Renneboog, Cara Vansteenkiste

Series number :

Serial Number: 

Date posted :

January 14 2019

Last revised :

January 03 2019
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  • takeovers • 
  • mergers and acquisitions • 
  • long-run performance • 
  • Corporate governance

This paper provides an overview of the academic literature on the market for corporate control, and focuses specifically on firms’ performance around and after a takeover. Despite the aggregate M&A market amounting to several trillions USD on an annual basis, acquiring firms often underperform relative to non-acquiring firms, especially in public takeovers.

Although hundreds of academic studies have investigated the potential determinants of M&A success, the wide variety of performance measures and sample sizes complicates the drawing of accurate and unambiguous conclusions. In this light, our survey compiles the recent literature and aims to identify which factors robustly contribute to and which factors hurt long-run deal success. We identify that long-run deal performance is affected by key determinants such as serial acquisitions driven by CEO overconfidence, acquirer-target relatedness and complementarity, and shareholder intervention in the form of voting or activism.


Real name:
Cara Vansteenkiste
UNSW Business School