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Target firms capital structure complexity and its effect on acquisition premium

Engfelt Telhag, Emma LU and Bell, Madison LU (2023) BUSN79 20231
Department of Business Administration
Abstract
The purpose with the thesis is to investigate whether a change in a target firm's capital structure complexity has an impact on the acquisition premium paid by the acquirer, and whether this effect changes during times of banking and/or market crises. The sample consists of 618 M&A deals with public firms based in the US, Canada, and Europe during 2004–2022. The thesis presents findings indicating that when a target firm's capital structure becomes more complex, the acquirer tends to pay a higher acquisition premium. Additionally, the results from the study suggest that this effect is amplified when the change occurs amidst a banking or market crisis. These conclusions are supported by two robustness tests.
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author
Engfelt Telhag, Emma LU and Bell, Madison LU
supervisor
organization
course
BUSN79 20231
year
type
H1 - Master's Degree (One Year)
subject
keywords
Acquisition premium, capital structure complexity, banking crisis, market crisis, M&A transactions
language
English
id
9130855
date added to LUP
2023-09-14 16:10:18
date last changed
2023-09-14 16:10:18
@misc{9130855,
  abstract     = {{The purpose with the thesis is to investigate whether a change in a target firm's capital structure complexity has an impact on the acquisition premium paid by the acquirer, and whether this effect changes during times of banking and/or market crises. The sample consists of 618 M&A deals with public firms based in the US, Canada, and Europe during 2004–2022. The thesis presents findings indicating that when a target firm's capital structure becomes more complex, the acquirer tends to pay a higher acquisition premium. Additionally, the results from the study suggest that this effect is amplified when the change occurs amidst a banking or market crisis. These conclusions are supported by two robustness tests.}},
  author       = {{Engfelt Telhag, Emma and Bell, Madison}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Target firms capital structure complexity and its effect on acquisition premium}},
  year         = {{2023}},
}