We study the dynamic profit-maximizing selling mechanism in an M&A environment with costly bidder entry and without entry fees. Depending on the parameters, the optimal mechanism is implemented by a standard auction, or by a two-stage procedure with exclusive offers to one bidder followed by an...

While acquisitions are a popular form of investment, the link between firms' financial constraints and acquisition policies is not well-understood. We develop a model in which financially-constrained bidders decide when to approach the target, how much to bid, and whether to bid in cash or...

This survey introduces a two-volume, 1,900-page reprint collection of articles recently published by Elsevier/North-Holland journals. Volume 1 begins with a comprehensive overview of the empirical evidence, followed by introductions to the econometrics of event studies and various techniques for...

Contingent future payments have gained a solid reputation as fundamental ingredients of business acquisition transactions. Earn-outs specifically are a species of contingent future payments that have proved helpful in a plethora of recent merger deals. An earn-out is payment for performance...

Using a structural model, I estimate the value gain from coinsurance when two firms merge. For most mergers, the estimated gains from coinsurance are small, smaller than the counterfactual gains if firms were to merge randomly, suggesting that coinsurance is not the primary motivation for most...

This study analyzed activism that leads to a merger or acquisition (M&A) of a firm to see its benefits for the shareholders at the target firm as well as its acquirer. It used over thirty years of data to understand the impact of the activists’ demands of strategic significance for the firms....

The UBS- Credit Suisse (CS) merger in March 2023, one of the biggest banking unions in history, was an emergency rescue deal engineered by Swiss authorities to avoid more market-shaking turmoil in global banking. The merger resulted in a significant increase in the combined stakeholder net...

A firm can merge with one of n potential partners. The owner of each firm has private information about both his firm's stand-alone value and a component of the synergies that would be realized by the merger involving his firm. We characterize incentive-efficient mechanisms in two cases. First,...

We study for a sample of international mergers and acquisitions the effectiveness of three takeover bidding strategies first in preventing bidder contests and second, if a contest has occurred, in increasing the probability of a successful offer. Our results indicate that support for the...

This paper develops an auction design framework to analyze various methods for assessing “fair value” in post-merger appraisal proceedings. Our inquiry spotlights an approach recently embraced by some courts benchmarking fair value against the merger price itself. We show that merger price...