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"Left at the Altar? A Relational View of Merger and Acquistion Announcements in the 1990s"

Ruth V. Aguilera, John C. Dencker, and Xavier Escandell


First Author :

Ruth V. Aguilera
Business Administration
University of Illinois at Urbana-Champaign
1206 S. Sixth Street
M/C 706
Champaign, IL 61820

(217) 333-7090

Second Author :

John C. Dencker
Institute of Labor and Industrial Relations
University of Illinois at Urbana-Champaign
504 E. Armory, Room 215 ILIR
Champaign, IL 61820

(217) 333-2383

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Third Author :

Xavier Escandell
University of Illinois at Urbana-Champaign
702 S. Wright St.
Urbana, IL 61801

(217) 344-2178

Abstract :
In this paper, we analyze data on the world’s largest merger and acquisition (M&A) announcements in the 1990s to explore the relational factors that determine their completion or withdrawal. Existing research on this little understood phenomenon in the M&A process typically focuses on the characteristics and actions of acquirer firms to understand financial and strategic M&A elements. We offer a new perspective by focusing on the dyadic relationship between acquirer and target firms. Controlling for strategic and financial factors, we find that the completion of an announced M&A is more likely to the extent that the relational capabilities stemming from country-level, industry-level and organizational-level factors generate a cooperative and trustworthy relationship. We conclude by discussing theoretical and managerial implications of our multi-level relational model.
JEL Classification : D21 , D23 , D74 , D81
Keywords :
acquisition, announcements, corporate governance, M&A, merger
Footnotes & Acknowledgements :
This is a revised version of Paper 04-0117. SSRN Web Address:
Manuscript Received : 2005
Manuscript Published : 2005
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