Financial and strategic acquirers on takeover premiums: a universal and time independent relationship?
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2020-07-17
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en
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Abstract
Using data from US and European takeover deals in the period 1997-2006 and 2009-2018, this paper tested the unspoken assumption present in the existing literature that differences in takeover premiums between financial and strategic buyers are consistent over time and geographical location. By comparing the takeover data of the two time periods this paper shows that the difference in takeover premiums between US financial and strategic buyers decreased after the financial crisis of 2008, due to a reduction in the mean premium paid by strategic buyers. This result suggests that the crisis and the reforms that followed reduced the agency costs within a strategic buyer. At the same time, it has not been proven that the difference in level of investor protection, which is a result of the applied law system, led to a higher difference in takeover premiums between the buyers groups in Europe compared to the US.
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Faculteit der Managementwetenschappen