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Targets’ earnings management and ownership decisions in M&A: Can less be more ?

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  • Perafán-Peña, Héctor Fabio
  • Gill-de-Albornoz Noguer, Belén
  • Giner, Begoña

Abstract

In a sample of 1,097 European merger and acquisitions (M&A) deals, we find that the targets exhibiting higher levels of accruals earnings management (AEM) relate to lower ownership stakes offered by acquirers. Real earnings management (REM) measures do not relate to ownership decisions. This research contributes to broadening our knowledge about accounting information's role in the intricacies of M&A negotiations.

Suggested Citation

  • Perafán-Peña, Héctor Fabio & Gill-de-Albornoz Noguer, Belén & Giner, Begoña, 2024. "Targets’ earnings management and ownership decisions in M&A: Can less be more ?," Finance Research Letters, Elsevier, vol. 62(PA).
    • Handle: RePEc:eee:finlet:v:62:y:2024:i:pa:s1544612324001636
    DOI: 10.1016/j.frl.2024.105133
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    More about this item

    Keywords

    Mergers and acquisitions; Earnings management; Ownership decisions;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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