"This paper examines the impact of mergers on default risk, finding that, on average, a merger increases the default … risk of the acquiring firm. This is surprising for two reasons: risk reduction is among the reasons commonly cited for … mergers, and asset diversification should reduce default risk unless the newly-merged firm takes some action to increase risk …

Acquirers and targets define and allocate interim risk through Material-Adverse-Event (MAE) exclusions in merger … agreements. I examine why MAE-exclusions exist based on the risk they address and assess whether such risk allocation affects the … asymmetry, and to allocate exogenous risk on the acquirer. I find little support for the use of MAE-exclusions to create …

Adjustment of behavior to maintain risk, known as risk homeostasis, has previously been studied in a variety of … psychological, health, social and economic contexts. This paper examines the evidence for risk homeostasis in corporate financial …-bidding peer firms prior to M&As, relative risk levels subsequently return to original levels. We argue this pattern is consistent …

This paper discusses option strategies that can be used to enhance returns or reduce risk in a merger book. Examples …

In an "activist risk arbitrage," a shareholder attempts to reshape an announced M&A through public campaigns, profi …