Determinants of Global Merger and Acquisition (M&A) Deals Completion: Focus on the Role of the Firms’ M&A Experience

Abstract

This study examined the determinants of global merger and acquisition (M&A) deals completion by using organizational learning theory and the concept of experience. The paper used a sample of 2,370 Chinese firms from 2,187 global M&A deals extracted from the Zephyr M&A database. By applying the Logit regression analysis, the paper revealed a number of significant results. It was confirmed that the M&A experience has transfer effect across different countries. Moreover, the M&A experiences in China and other parts of the world have either a negative effect on the probability of deal completion, or no effect at all. However, M&A experience in a particular country shows a significant positive relationship with subsequent M&A in that country. Such effect of experience within a particular country is also observed with regard to the prior overall M&A experience of Chinese firms. Accordingly, the experience and learning effect of an M&A deal may occur within a country rather than across countries. Further, with regard to the control variables, M&A deals with a greater number of advisors show a higher deal-completion rate, while deals with a greater number of participating firms present the opposite pattern.