Hostility and deal completion likelihood in international acquisitions: The moderating effect of information leakage

Abstract

Examining a comprehensive sample of international acquisitions over the 1997–2013 period, we document that deal hostility negatively impacts the likelihood of deal completion, reinforcing previous research on domestic merger and acquisition activity in the United States. The negative relationship, however, is stronger in the presence of substantial information leakage about the deal. Substantial information leakage about the impending deal imposes an additional tangible obstacle that impedes the negotiations in hostile deals. Our results highlight information leakage prevention as being crucial in ensuring merger negotiation success.