Does investment bank reputation affect bidder returns in mergers and acquisitions? Empirical evidence from the European markets

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School of Business | Bachelor's thesis
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Date
2020
Major/Subject
Mcode
Degree programme
Rahoitus
Language
en
Pages
29 + 3
Series
Abstract
This thesis analyses whether using a top-tier financial advisor in a merger or an acquisition produces higher returns for the bidder in the deal, indicating that the reputation of the financial advisor matters in deal-making. To evaluate the reputational effect, I apply cross-sectional OLS regression analysis for European mergers and acquisitions that are announced between 1.1.2006 and 31.12.2019. I find evidence that using a top-tier advisor produces higher announcement returns. In addition, I observe that the reputational effect is larger when the bidder is small, suggesting that the reputation of the financial advisor creates more credibility for the bidder.
Description
Thesis advisor
Shin, Sean
Keywords
mergers and acquisitions, financial advisor, reputation, M&A
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