Abstract
This study examines how the personality trait of the target firm’s CEO influences the acquisition completion likelihood and duration. Using a sample of 621 acquisitions undertaken between U.S. public firms, we find an acquisition involving an extravert target CEO is less likely to consummate and takes more time to complete. Further, we suggest that such effect is contingent on target CEOs’ anticipated retirement because retiring extraverted target CEOs tend to suffer less from losses caused by the acquisition. In addition, prior shareholding ties can foster familiarity and trust, which mitigate extraverted target CEOs’ resistance, while the tight integration following related acquisitions could make them feel more threatened by being taken over. Our theory and findings provide a novel explanation of difficulties in completing an acquisition and enrich research on the behavioral aspects of acquisitions.
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