Accounting comparability between M&A bidders and targets and deal outcome
Seraina C. Anagnostopoulou and
Andrianos Tsekrekos
Journal of International Financial Markets, Institutions and Money, 2025, vol. 99, issue C
Abstract:
We examine whether acquirers make better acquisitions when target firms’ financial statements exhibit higher comparability with those of the acquirer. We hypothesize that higher comparability between M&A bidders/targets will result in lower deal integration and information processing costs, and easier detection of any financial misreporting practices. We examine long-run deal performance and find that financial reporting comparability between acquirers/targets is positively associated with long-run deal performance and makes post-acquisition divestitures less likely, consistent with comparability resulting in more successful acquisitions. We provide evidence on how comparative accounting information between M&A counterparties influences capital allocation decisions and value creation.
Keywords: Financial statement comparability; Mergers and Acquisitions; M&As; Divestitures; Long-term M&A performance (search for similar items in EconPapers)
JEL-codes: G14 G34 M41 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:99:y:2025:i:c:s1042443124001628
DOI: 10.1016/j.intfin.2024.102096
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