Product Market Competition, Mergers and Acquisitions, and Covenant Redesign

IF 1.9 Q2 BUSINESS, FINANCE

Review of Corporate Finance Studies Pub Date : 2024-09-09 DOI:10.1093/rcfs/cfae019

Hadiye Aslan, Madhu Kalimipalli, Praveen Kumar, Buvaneshwaran Venugopal

引用次数: 0

Abstract

Industry competition shocks are major drivers of mergers and acquisitions (M&A). We document strong positive effects of competition shocks on M&A-related covenant redesign. Acquiring firms in high-competition environments are significantly more likely to undertake tender offer bond repurchases and reduce restrictions on mergers, investments, payouts, and financing, but increase change-in-control covenants. This effect is stronger for larger, more profitable firms. Moreover, announcement returns from M&A transactions of redesigning firms in more competitive settings are significantly higher, while acquisition deal premiums are lower. Our study shows the significant effect of industry competition shocks on debt recontracting in M&A. (JEL G32, G34)

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产品市场竞争、并购和公约重新设计

行业竞争冲击是并购（M&A）的主要驱动因素。我们记录了竞争冲击对与 M&A 相关的契约重新设计的强烈正面影响。高竞争环境下的并购企业更有可能进行要约收购债券回购，减少对兼并、投资、支付和融资的限制，但会增加控制权变更契约。这种效应对规模更大、盈利能力更强的公司更为明显。此外，在竞争更激烈的环境中，重新设计公司的并购交易的公告回报明显更高，而收购交易溢价则更低。我们的研究表明，行业竞争冲击对 M&A 中的债务重新签约有重大影响。(JEL G32, G34)

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Review of Corporate Finance Studies BUSINESS, FINANCE-

CiteScore

17.80

自引率

1.80%

发文量

期刊介绍： The Review of Corporate Finance Studies (RCFS) is dedicated to publishing high-quality research in the expansive field of Corporate Finance. The journal seeks original contributions, reviewing papers based on their unique insights into Corporate Finance. This encompasses a wide spectrum, including a firm's interactions with stakeholders, capital markets, internal organization structure, compensation mechanisms, corporate governance, and capital management. RCFS also welcomes research in financial intermediation, financial institutions, microstructure, and the implications of asset pricing for Corporate Finance. The journal considers theoretical, empirical, and experimental papers for review.