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Accounting comparability between M&A bidders and targets and deal outcome

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  • Anagnostopoulou, Seraina C.
  • Tsekrekos, Andrianos E.

Abstract

We examine whether acquirers make better acquisitions when target firms’ financial statements exhibit higher comparability with those of the acquirer. We hypothesize that higher comparability between M&A bidders/targets will result in lower deal integration and information processing costs, and easier detection of any financial misreporting practices. We examine long-run deal performance and find that financial reporting comparability between acquirers/targets is positively associated with long-run deal performance and makes post-acquisition divestitures less likely, consistent with comparability resulting in more successful acquisitions. We provide evidence on how comparative accounting information between M&A counterparties influences capital allocation decisions and value creation.

Suggested Citation

  • Anagnostopoulou, Seraina C. & Tsekrekos, Andrianos E., 2025. "Accounting comparability between M&A bidders and targets and deal outcome," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 99(C).
  • Handle: RePEc:eee:intfin:v:99:y:2025:i:c:s1042443124001628
    DOI: 10.1016/j.intfin.2024.102096
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    More about this item

    Keywords

    Financial statement comparability; Mergers and Acquisitions; M&As; Divestitures; Long-term M&A performance;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • 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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