Explaining M&A performance: a configurational approach

Finance and management literature has witnessed numerous contributions analysing the market reaction to M&A deals and how this is affected by acquirer-, target- and deal-specific factors. However, if, on the one hand, the literature seems to agree that, generally, an M&A announcement has a negative impact on acquirer’s stock performance, scholars do not reach unanimous conclusions regarding the impact of individual variables on the acquirer’s performance. In response, the aim of this study is to demonstrate the potential of a configurational approach, in understanding M&A deals and their impact on acquirer’s stock performance. In this respect, a specific configuration of features was identified that, in contrast with the common belief of negative impact on acquirer’s stock returns associated with M&A announcements, registers a positive performance. This suggests that the focus of the literature should not be on one single factor, rather on evaluating holistically an M&A transaction, and this represents the main contribution of this study.