The impact of institutional investors on mergers and acquisitions in the United Kingdom

Andriosopoulos, Dimitris and Yang, Shuai (2015) The impact of institutional investors on mergers and acquisitions in the United Kingdom. Journal of Banking and Finance, 50. pp. 547-561. ISSN 0378-4266 (https://doi.org/10.1016/j.jbankfin.2014.06.004)

[thumbnail of AndriosopoulosyangJBF2014-impact-of-institutional-investors-on-mergers] PDF. Filename: The_impact_of_institutional_investors_on_mergers_acquisitions_in_the_United_Kingdom.pdf
Accepted Author Manuscript
Download (907kB)

Abstract

In this paper we investigate the impact of institutional ownership on UK mergers and acquisitions. We employ a comprehensive sample of M&As conducted by UK acquirers from 2000 to 2010, thus including a full cycle of peak and trough in M&A waves. We find that institutional investors increase the likelihood of an M&A to be a large, cross-border deal, opting for full control. Moreover, institutional ownership concentration and foreign institutional ownership increase the likelihood of cross-border M&As. In addition, we assess the influence of institutional shareholders’ investment horizon and find that while investment horizon have a negative influence in encouraging cross-border M&As, the presence of long-term investors encourages larger M&As. Finally, even after controlling for the 2007-08 financial crisis the market reacts negatively to the announcement of cross-border M&As.

ORCID iDs

Andriosopoulos, Dimitris ORCID logoORCID: https://orcid.org/0000-0003-3033-2308 and Yang, Shuai;
  • Item type:Article
    ID code:48979
    Dates:
    Date
    Event
    31 January 2015
    Published
    13 June 2014
    Published Online
    3 June 2014
    Accepted
    Notes:. NOTICE: This is the author’s version of a work that was accepted for publication in the Journal of Banking and Finance. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Banking and Finance, DOI: 10.1016/j.jbankfin.2014.06.004
    Subjects:Social Sciences > Finance
    Social Sciences > Commerce
    Social Sciences > Economic Theory
    Department:Strathclyde Business School > Accounting and Finance
    Depositing user: Pure Administrator
    Date deposited:24 Jul 2014 10:17
    Last modified:18 Nov 2024 01:07
    Related URLs:
    URI:https://strathprints.strath.ac.uk/id/eprint/48979
CORE (COnnecting REpositories)