TY - JOUR
T1 - The role of corporate political strategies in M&As
AU - Croci, Ettore
PY - 2017
Y1 - 2017
N2 - In line with the view that politics can complicate M&A deals, we find that firms contributing to political action committees or involved in lobbying are less likely to be acquired and their takeover process is lengthier. As we empirically show, this can be explained by the fact that politicians have motives to interfere with the takeover process due to career concerns, in terms of getting re-elected and raising funds for future campaigns. We also document that politically connected target firms command higher takeover premiums from bidders lacking political expertise, consistent with the notion that the market regards target firms' connections, not easily replicable by bidders, as means to enhance growth opportunities of the merged firm.
AB - In line with the view that politics can complicate M&A deals, we find that firms contributing to political action committees or involved in lobbying are less likely to be acquired and their takeover process is lengthier. As we empirically show, this can be explained by the fact that politicians have motives to interfere with the takeover process due to career concerns, in terms of getting re-elected and raising funds for future campaigns. We also document that politically connected target firms command higher takeover premiums from bidders lacking political expertise, consistent with the notion that the market regards target firms' connections, not easily replicable by bidders, as means to enhance growth opportunities of the merged firm.
KW - Acquisition probability
KW - Business and International Management
KW - Economics and Econometrics
KW - Finance
KW - Lobbying activity
KW - Merger and acquisition
KW - PAC contribution
KW - Strategy and Management1409 Tourism, Leisure and Hospitality Management
KW - Takeover premium
KW - Time to completion
KW - Acquisition probability
KW - Business and International Management
KW - Economics and Econometrics
KW - Finance
KW - Lobbying activity
KW - Merger and acquisition
KW - PAC contribution
KW - Strategy and Management1409 Tourism, Leisure and Hospitality Management
KW - Takeover premium
KW - Time to completion
UR - http://hdl.handle.net/10807/93853
UR - http://www.elsevier.com/locate/jcorpfin
U2 - 10.1016/j.jcorpfin.2017.01.009
DO - 10.1016/j.jcorpfin.2017.01.009
M3 - Article
SN - 0929-1199
VL - 43
SP - 260
EP - 287
JO - Journal of Corporate Finance
JF - Journal of Corporate Finance
ER -