Initiating contact in merger negotiations: Who leads and who follows?

Stephen N. Jurich and M. Mark Walker

Journal of Economics and Business, 2022, vol. 119, issue C, No S014861952100062X

Abstract: We examine the determinants of the managers’ choice of negotiating procedure when firms merge. We use company filings with the Securities and Exchange Commission (SEC) to identify the merging firms’ negotiating procedure and their underlying operating, marketing, and financial motivations for pursing the deal. When target-firm managers cite technological expertise and access to capital as reasons for the merger, we find that they are less likely to use an auction as the sales procedure. Acquiring-firm managers are less likely to initiate the process when they cite technological expertise as a reason for the merger.

Keywords: Deal motivations; Controlled-sale; Auction; Negotiating procedure (search for similar items in EconPapers)
JEL-codes: G30 G34 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jebusi:v:119:y:2022:i:c:s014861952100062x

DOI: 10.1016/j.jeconbus.2021.106044

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