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Do acquirers of mega mergers prefer to improve debt level? An investigation on mega deals and leverage change

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  • Gao, Zaihan
  • Bao, Yue

Abstract

This paper investigates whether mega deals tend to improve their debt structure during the takeover process. By analysing 1,719 M&A deals in United States announced between 1986, and 2018, we find that mega deals do tend to experience larger leverage change and debt change during the takeover process. Furthermore, our study shows that mega deals with larger leverage change are more likely to perform better in the short run, while no significant difference is found for the long-run performance.

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  • Gao, Zaihan & Bao, Yue, 2022. "Do acquirers of mega mergers prefer to improve debt level? An investigation on mega deals and leverage change," Finance Research Letters, Elsevier, vol. 47(PB).
    • Handle: RePEc:eee:finlet:v:47:y:2022:i:pb:s1544612322000939
    DOI: 10.1016/j.frl.2022.102780
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    Cited by:

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    2. Gao, Zaihan & Bao, Yue, 2023. "An investigation of market reaction differences between mega-deals and non–mega deals considering industry concentration," Finance Research Letters, Elsevier, vol. 51(C).

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