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Does Regulatory Exposure Create M&A Synergies?
SSRN Electronic Journal
2022
Abstract
We study the impact of regulation on acquisition investment, using a novel firm-level measure of exposure to all federal regulations. Highly regulated companies issue more acquisition bids, invest more in those transactions, and earn higher M&A announcement returns. Moreover, highly regulated acquirers exhibit better long-term performance, greater M&A synergies, and a significant reduction in their regulatory exposure after merger completion. The benefits are stronger in deals with small transaction values and in those involving private targets. Overall, our findings uncover a new link between M&A and regulation, highlighting synergy opportunities which materially affect corporate investment choices
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Details
- Title
- Does Regulatory Exposure Create M&A Synergies?
- Creators
- Eliezer M Fich - Drexel University
- Publication Details
- SSRN Electronic Journal
- Publisher
- SSRN
- Resource Type
- Other
- Language
- English
- Academic Unit
- Finance
- Other Identifier
- 991020542328004721