Merger Outcomes Research Articles

An SEM-ANN analysis of the influence of strategic merger on strategic postchange of family businesses

Purpose Companies seek to increase the percentage of acquisitions in different parts of the world by expanding operations. Many companies are adopting strategic mergers to expand their influence. However, most strategic change programs fail to achieve their objectives. This study aims to investigate employees’ reactions after strategic mergers through the mediating role of the employees’ psychological context. It was necessary to identify the most prominent postmerger employees’ behaviors. The study addressed this gap by investigating the outcomes of strategic mergers. Design/methodology/approach Data for this study were collected from 30 family businesses. Accordingly, 341 questionnaires were collected with an overall response rate of 64%. The structural equation modeling (PLS-SEM) approach and the nonlinear relationships approach were adopted by implementing artificial neural network (ANN) analysis. Findings The results confirm that there is a clear impact of strategic mergers on employees’ postmerger behavior because of the change at the hierarchical level and the process of distributing roles. Employees’ psychological context (individual incentives, anxiety and individual mobbing) mediates the relationship between strategic mergers and postmerger employees’ behavior. In addition, individual incentives are considered the main contributor to retaining or not retaining employees in family businesses after strategic merger. Research limitations/implications Policymakers in organizations must pay attention to employees’ possible reactions to the internal and external policies of the organization by increasing individual incentives and reducing individual mobbing toward strategic merger. This study has theoretical implications that are critical guidelines for academics in mitigating the negative consequences for employees’ postmerger behavior. This study captured linear and nonlinear relationships to discover the determinants and antecedents of a strategic merger in family businesses. However, future studies should focus on using more robust statistical methods by adopting decision-making methods to determine the best and worst companies in terms of adopting strategic mergers. Originality/value The scarcity of literature on the most important determinants of postmerger employees’ behavior is considered an encouragement to conduct the current study. To this end, this study enriches the ongoing and future literature by examining the most important factors influencing the strategic merger of family businesses. Family businesses have changed the economic landscape of many countries. The investigation of the strategic merger of these companies is considered a worthy matter of study to improve the nation’s economy.

The impact of ESG distance on mergers and acquisitions

In this study, we utilize the most recent ESG (Environmental, Social, and Governance) data to calculate the ESG distance between acquiring and target firms, subsequently assessing its impact on merger outcomes. Our analysis suggests that deals with a larger ESG distance are associated with reduced cumulative abnormal returns (CARs) around the deal announcements. We find that, following the Kyoto Protocol in 2005, counterparties with larger ESG distances are less favored by investors. This suggests that the market perceives significant ESG distance as a potential impediment to seamless post-merger integration. Notably, a pronounced acquirer-target ESG distance diminishes the propensity for mergers, especially when target firms with more bargaining power during the negotiation. In the long-term performance of acquiring firms, we discern that ESG disparity reduces firm performance and increases crash risk.

The Time Evolution of Fast Flavor Crossings in Postmerger Disks around a Black Hole Remnant

We postprocess a three-dimensional, general relativistic, full transport neutrino radiation magnetohydrodynamics simulation of the black-hole-accretion disk-wind system thought to be a potential outcome of the GW170817 merger to investigate the presence of electron lepton number (ELN-XLN) crossings in the neutrino angular distribution. Neutrinos are evolved with an explicit Monte Carlo method and can interact with matter via emission, absorption, or scattering. Within the postprocessing framework, we find ubiquitous occurrence of ELN-XLN crossings at early times (∼11 ms), but this does not hold for later times in the simulation. At postmerger times of ∼60 ms and beyond, ELN-XLN crossings are only present near the equator. We provide a detailed analysis of the neutrino radiation field to investigate the origin and time evolution of these crossings. Previous reports have suggested ubiquitous flavor crossings persisting throughout the simulation lifetime, albeit for different sets of conditions for the merger remnant, the treatment of hydrodynamics, and neutrino transport. Even though we do not perform a direct comparison with other published works, we qualitatively assess the reasons for the difference with our results. The geometric structure and evolution of the ELN-XLN crossings found in our analysis, and by extension, fast flavor instabilities, have important implications for heavy element nucleosynthesis in neutron star mergers.

Black hole-neutron star mergers with massive neutron stars in numerical relativity

We study the merger of black hole-neutron star (BH-NS) binaries in numerical relativity, focusing on the properties of the remnant disk and the ejecta, varying the mass of compactness of the NS and the mass and spin of the BH. We find that within the precision of our numerical simulations, the remnant disk mass and ejecta mass normalized by the NS baryon mass (M^rem and M^eje, respectively), and the cutoff frequency fcut normalized by the initial total gravitational mass of the system at infinite separation approximately agree among the models with the same NS compactness CNS=MNS/RNS, mass ratio Q=MBH/MNS, and dimensionless BH spin χBH irrespective of the NS mass MNS in the range of 1.092−1.691M⊙. This result shows that the merger outcome depends sensitively on Q, χBH, and CNS but only weakly on MNS. This justifies the approach of studying the dependence of NS tidal disruptions on the NS compactness by fixing the NS mass but changing the EOS. We further perform simulations with massive NSs of MNS=1.8M⊙, and compare our results of M^rem and M^eje with those given by existing fitting formulas to test their robustness for more compact NSs. We find that the fitting formulas obtained in the previous studies are accurate within the numerical errors assumed, while our results also suggest that further improvement is possible by systematically performing more precise numerical simulations. Published by the American Physical Society 2024

Observed Relationships between Supercell Mesocyclone Intensity and Evolution, Background Environmental Characteristics, and Cell Mergers

Abstract Cell mergers with supercells are relatively common, but much remains unknown about how they may influence subsequent supercell hazards. Furthermore, many outstanding questions regarding mesocyclone evolution exist despite numerous studies linking supercell hazards with the background environments in which they occur. In this study, we analyze the Multi-Year Reanalysis of Remotely Sensed Storms dataset along with hundreds of observed supercell tracks to begin addressing these ideas. In line with recent studies, the outcome of a supercell–cell merger (specifically the final strength of the low-level supercell mesocyclone) is not strongly related to the background environment. Of the parameters that we tested, mixed-layer (ML) LCL exhibited the largest correlation, but the very small coefficient of determination suggests limited operational use. More significantly, the incorporation of Storm Prediction Center objective analyses yields novel quantification of observed mesocyclone strengths in different environments. Of the environmental characteristics tested, kinematic parameters like 0–3-km storm-relative helicity (SRH) and 0–3-km bulk wind difference are more correlated with peak mesocyclone intensity than thermodynamic variables like CAPE and CIN. 0–3-km SRH exhibits the largest correlation, and its variability explains roughly one-third of the variance of peak azimuthal shear. We show trends in peak mesocyclone intensity across notable environmental parameter spaces, as well as how low-level mesocyclone strength fluctuates as background environmental characteristics evolve. Environmental trends during and preceding the times of peak mesocyclone strength are quantified. These analyses may be useful for predicting short-term mesocyclone intensity changes in real time. Significance Statement This study addresses open research questions related to how storms merging with supercell thunderstorms may influence supercell evolution and how supercells tend to evolve in different background environments. We find that an environmental measure of cloud-base height is statistically correlated with whether a supercell–cell merger will yield a strengthening or weakening supercell, but the strength of this correlation is quite weak. We find stronger correlations between peak supercell strength across storm lifetimes and some environmental characteristics, particularly parameters related to the change in the wind with height in the lowest few kilometers above ground level. These relationships may be useful for predicting short-term changes in supercell strength in real time.

The evolution of judicial standards: evidence from litigated merger trials

Abstract A popular narrative suggests that, in the wake of the rise of the Chicago School, the judiciary has grown increasingly lax, making it difficult for antitrust agencies to successfully challenge mergers in court. We develop a theoretical framework to yield propositions regarding merger challenges, settlements, and outcomes under varying judicial standards. We then undertake an empirical investigation of all mergers, challenges, and litigated outcomes in the United States over 1982–2021 to test for the presence of shifting judicial standards. Contrary to the popular narrative, we find evidence that judicial standards have become increasingly pro-enforcement over the past four decades.

On the X-ray efficiency of the white dwarf pulsar candidate ZTF J190132.9+145808.7

Abstract Strongly magnetized, rapidly rotating massive white dwarfs (WDs) emerge as potential outcomes of double degenerate mergers. These WDs can act as sources of non-thermal emission and cosmic rays, gethering attention as WD pulsars. In this context, we studied the X-ray emissions from ZTF J190132.9+145808.7 (hereafter ZTF J1901+14), a notable massive isolated WD in the Galaxy, using the Chandra X-ray observatory. Our results showed 3.5σ level evidence of X-ray signals, although it is marginal. Under the assumption of a photon index of 2, we derived its intrinsic flux to be 2.3 (0.9–4.7) × 10−15 erg cm−2 s−1 and luminosity 4.6 (2.0–9.5) × 1026 erg s−1 for a 0.5–7 keV band in the $90\%$ confidence range, given its distance of 41 pc. We derived the X-ray efficiency (η) concerning the spin-down luminosity to be 0.012 (0.0022–0.074), a value comparable to that of ordinary neutron star pulsars. The inferred X-ray luminosity may be compatible with curvature radiation from sub-TeV electrons accelerated within open magnetic fields in the magnetosphere of ZTF J1901+14. Conducting more extensive X-ray observations is crucial to confirm whether ZTF J1901+14-like isolated WDs are also significant sources of X-rays and sub-TeV electron cosmic rays, similar to other WD pulsars in accreting systems.

Intellectual property protection and M&A performance

This investigation delves into the connection between the safeguarding of intellectual property and the outcomes of corporate mergers and acquisitions (M&As) and the mechanisms underlying this relationship. The research uses yearly data from 2009 to 2022, encompassing A-share listed companies in Shanghai and Shenzhen, and empirically examines how intellectual property protection influences corporate M&A performance. Furthermore, it delves into the intermediary functions of accessing financial, information, and policy resources within this context. The findings reveal that bolstering intellectual property rights (IPR) protection notably enhances M&A performance. This enhancement is particularly pronounced in state-owned enterprises and those with a stronger resource foundation. Additionally, IPR protection indirectly augments M&A performance by facilitating improved access to financial, information, and policy resources for firms. These discoveries offer valuable insights for policymakers and corporate practitioners, aiding in a deeper comprehension of the pivotal role that IPR protection plays in the realm of mergers and acquisitions.

Asymmetric Learning in Successive Mergers and Acquisitions: Overconfidence and Loss Aversion

Using data from 865 acquisition events launched by Chinese A-share listed companies between 2013 and 2019, we divide the dataset into two subsamples: first-time merger successes and first-time merger failures. For firms that experienced initial merger success, we find the outcomes of their subsequent merger activities to be negative, as managerial overconfidence hindered the assimilation of valuable insights from the initial successful experience. Conversely, in the case of firms that encountered initial merger failure, managerial loss aversion stimulated a learning process that led to improved performance in subsequent merger endeavors. Asymmetric learning effects are observed to significantly impact the merger outcomes of serial acquirers. Further analysis reveals that managerial age plays a role in optimizing this asymmetric learning effect.

Do women in the boardroom influence foreign acquisitions' premium and outcomes? Evidence from China

AbstractThis paper examines whether gender diversity influences foreign merger and acquisition (M&A) premiums and outcomes in China. Consistent with agency and resource dependence theories, we find that female directors significantly reduce the acquisition premium paid for foreign targets. We show that the market responds positively in the short‐term (measured by cumulative abnormal returns) to the announcement of foreign acquisitions by firms with greater female representation in the boardroom. We further find significant evidence that acquirers' boards comprising more female directors experience value creation and better operating synergies (measured by buy‐and‐hold abnormal returns and changes in return on assets) in the long‐term following engagement in foreign M&A deals. Interestingly, after distinguishing between female independent and executive directors, we find that our previous finding on board gender diversity can be attributable to both the monitoring (independent directors) and supervisory (executive directors) roles played by female directors. We also find evidence accords with the argument of the critical mass of female directors' representation in the boardroom. Our results are robust after controlling for endogeneity issues using instrumental variables (IV), propensity score matching (PSM), Heckman, and firm fixed‐effects methods. Overall, our findings offer additional empirical support for the global concern by regulators for improving corporate governance practices by increasing female quotas in the boardroom.

Simulations of spin-driven AGN jets in gas-rich galaxy mergers

ABSTRACT In this work, we use hydrodynamical simulations to explore the effects of kinetic active galactic nuclei (AGN) jet feedback on the progression and outcome of the major merger of two isolated, gas-rich galaxies. We present simulations that use the moving-mesh code arepo to follow the progression of the merger through the first passage and up to the final coalescence, modelling the black holes at the centres of both of the merging galaxies using our prescription for black hole accretion via an α-disc and feedback in the form of a spin-driven jet. We find that the jets drive large-scale, multiphase outflows which launch large quantities of cold gas out to distances greater than 100 kpc and with velocities that reach $\sim 2500 \, {\rm km \, s^{-1}}$. Gas in the outflows that decelerates, cools, and falls back on the galaxies can provide a rich source of fuel for the black hole, leading to intense episodes of jet activity in which the jet can become significantly misaligned. The presence of AGN jets affects the growth of the stellar component: star formation is moderately suppressed at all times during the merger and the peak of the star formation rate, attained during the final coalescence of the galaxies, is reduced by a factor of ∼2. Analysis of simulations such as these will play a central role in making precise predictions for multimessenger investigations of dual radio-AGN, which next-generation observational facilities such as LISA, Athena and SKA will make possible.

Study of star formation in dual nuclei galaxies using UVIT observations

ABSTRACT We have used the Ultraviolet Imaging Telescope (UVIT) aboard AstroSat to study star formation in a sample of nine dual nuclei galaxies with separations ⪅ 11 kpc, which is an expected outcome of galaxy mergers. To minimize the contribution of active galactic nuclei (AGN) emission, we have used mid-IR colour cut-offs and masked the AGN-dominated nuclei. The UV continuum slope (β) is used to calculate the internal extinction (AV) which ranges from 0.53 to 4.04 in the FUV band and 0.44 to 3.10 in the NUV band for the sample. We have detected 1−20 star-forming clumps in our sample galaxies. The extinction-corrected total FUV star formation rate (SFR) ranges from ∼0.35 to ∼32 M⊙ yr−1. Our analyses of AV, specific SFR (sSFR) show that dual nuclei sources are associated with dusty, star-forming galaxies. The FUV − NUV colour maps show redder colour in the nuclear and disc regions while bluer colour is observed in the outskirts of most galaxies which can be due to embedded dust or different stellar populations. We have found some signatures of possible stellar/AGN feedback like a ring of star formation, a redder ring around blue nuclei, etc. However, further observations are required to confirm this.

Analysis Report on Qingdao Haier's Acquisition of Candy in Italy

Since the implementation of economic reforms and opening up, the electricity industry has experienced remarkable growth, capturing an increasingly larger market share on the global stage. In response to this trend, the Chinese government has introduced numerous policies to encourage and support the industry's development. Concurrently, enterprises are recognizing the significance of cross-border cooperation as a means to foster their own progress and gain entry into international markets. Against this backdrop, Qingdao Haier, a telecommunications company, has embarked on several cross-border mergers, achieving notable successes. This article focuses on Qingdao Haier's acquisition of the Italian company Candy, using it as a case study to delve into the background, motivations, and outcomes of mergers and acquisitions between the two entities. By doing so, this study aims to offer valuable insights and inspiration to other Chinese companies seeking to expand their global presence.

Does investor sentiment impact premiums in M&A transactions?

This paper examines the impact of investor sentiment on merger outcomes, in particular on bid premiums. Using international data from 54 countries between 2000 and 2021, our results show that investor sentiment has a positive effect on bid premiums. Our findings also suggest that the association between investor sentiment and bid premiums is more pronounced in countries culturally prone to herd-like behavior and overreaction. However, this effect is reduced both in countries with highly efficient institutions and in serial deals. Our results are robust to several checks.

Animal spirits, hubris, narcissism: Behavioural determinants of merger and acquisition outcomes

This paper draws upon the animal spirit, hubris, and narcissism theories to conduct an empirical study investigating the behavioural determinants influencing mergers and acquisitions (M&A). While M&A transactions have shown a trend of value destruction for acquiring firm shareholders, they have simultaneously demonstrated value enhancement for shareholders of the acquired firms. The repercussions of this value erosion extend beyond shareholders, impacting pension funds, employees, customers, suppliers, government tax revenues, and banks within the economy. Utilising a long-event window methodology, the research examines cumulative abnormal returns (CARs) for acquirers’ shareholders over a three-year post-completion period, focusing on Australian acquisitions from 1990 to 2006. The findings highlight animal spirit, hubris, and narcissism as significant behavioural determinants shaping M&A outcomes, thereby contributing to the ongoing discourse on hubris and hubris syndrome in M&A, with a suggestion that narcissism may be more prevalent than hubris. Additionally, the study identifies the joint tenure period of the Chairman and Chief Executive Officer (CEO) in the acquiring firm as a statistically significant factor contributing to acquiring firm shareholder value in M&A activities. Notably, a significantly negative correlation between CEO remuneration change and M&A outcomes is found. The paper recommends enhanced transparency for remuneration and nominations committees to address corporate governance issues raised by the study.

Analyzing the impact of mergers on stock prices in the banking sector: An implication for strategic merger planning and stakeholder communication

This research delves into the intricate effects of mergers and acquisitions (M&A) on stock prices within the Saudi Arabian banking sector, employing the event study methodology (ESM) to examine both short-term and long-term impacts on stock valuations. The study meticulously calculates expected and abnormal returns (ARs) around merger events, shedding light on the significant influence these corporate actions exert on market perceptions and investor behavior. The methodology encompasses an analysis of daily stock price data before and after merger events, providing a detailed view of market reactions. Key findings reveal an immediate positive market response to merger announcements, driven by the anticipation of synergistic benefits, alongside diverse long-term stock price effects that underscore the complex relationship between initial expectations and actual merger outcomes. The research concludes that strategic merger planning and effective communication with stakeholders are crucial for realizing the anticipated benefits of mergers. By offering new insights into the sector-specific and regional dynamics that affect M&A outcomes, this study enhances understanding of the significant implications for investors, financial institutions, and policymakers engaged with the Middle Eastern financial markets.

Symmetry Breaking in Merging Binary Black Holes from Young Massive Clusters and Isolated Binaries

Properties of the to-date observed binary black hole (BBH) merger events suggest a preference toward spin–orbit aligned mergers. Naturally, this has caused widespread interest and speculations regarding implications on various merger formation channels. Here we show that (i) not only the BBH merger population from isolated binaries but also (ii) BBH population formed in young massive clusters (YMCs) would possess an asymmetry in favor of aligned mergers, in the distribution of the events’ effective spin parameter (χ eff). In our analysis, we utilize BBH merger outcomes from state-of-the-art N-body evolutionary models of YMCs and isolated binary population synthesis. We incorporate, for the first time in such an analysis, misalignments due to both natal kicks and dynamical encounters. The YMC χ eff distribution has a mean (an antialigned merger fraction) of 〈χ eff〉 ≤ 0.04 (f X − ≈ 40%), which is smaller (larger) than but consistent with the observed asymmetry of 〈χ eff〉 ≈ 0.06 (f X − ≈ 28%) as obtained from the population analysis by the LIGO–Virgo–KAGRA collaboration. In contrast, isolated binaries alone tend to produce a much stronger asymmetry; for the tested physical models, 〈χ eff〉 ≈ 0.25 and f X − ≲ 7%. Although the YMC χ eff distribution is more similar to the observed counterpart, none of the channels correctly reproduce the observed distribution. Our results suggest that further extensive model explorations for both isolated binary and dynamical channels as well as better observational constraints are necessary to understand the physics of “the symmetry breaking” of the BBH merger population.

Sectoral and institutional characteristics of acquirers and targets: a dyadic approach to deal completion

PurposeThis study takes a dyadic approach to explaining merger and acquisition (M&A) deal outcomes. Acknowledging the socio-cognitive (e.g. intangible and macro-environmental) idiosyncrasies, the authors theorize that some acquirer–target dyads have a superior ability to complete complex relational transactions in an M&A deal. Specifically, deals are successful when an acquirer and a target: are similar considering their sectoral characteristics, have contextually-informed deal-making competencies, and are familiar with one another given their sectoral and institutional features.Design/methodology/approachThis study uses logistic regression analysis to examine how sectoral and institutional characteristics in the acquiring and target company dyads relate to the likelihood of merger and acquisition deal completion.FindingsAnalyzing a sample of 37,560 M&A deals, the authors find empirical evidence in support of the dyadic to deal completion. The authors find that sectoral similarity and institutional familiarity in an M&A dyad can predict the likelihood of deal completion. Specifically, service multinational acquirers are more competent than their manufacturing counterparts in general, and in same-sector and same-country deals in particular. In contrast, service sector acquirers also are at a relative disadvantage vis-à-vis their manufacturing counterparts in cross-national deals.Research limitations/implicationsConsidering the theoretical and managerial implications, the authors identify new avenues for future research on service and manufacturing M&A dyads that can deepen the knowledge of inter-firm transaction processes.Originality/valueFirst, the authors draw on the socio-cognitive, behavioral, and relational models to explain M&A deal process in both domestic and cross-border settings. Drawing on service vis-à-vis manufacturing sector business models, the authors predict deal completion. Second, the authors propose that familiarity between the acquiring and target companies in the form of sectoral and cross-national factors becomes pivotal to the inter-firm processes. Finally, the authors empirically demonstrate how inter-firm dynamics in a dyad can pose complex deal-making challenges, which make some acquirers especially susceptible to contextual shocks.

Sunlight is the Best Disinfectant: Real-Time Comment Letters and Large M&As in China

ABSTRACTThis paper investigates how communications between regulators and firms through comment letters affect the outcomes of large mergers and acquisitions (M&As) in China. Unlike the U.S. Securities and Exchange Commission (SEC), which uses comment letters to improve the accuracy of the measurement of deals, Chinese regulators worry about controlling shareholders' self-dealing and use real-time comment letters to expose suspicious deal specifics and to create pressure for controlling shareholders to back down. I find that the Chinese stock exchanges issue more severe comment letters on deal filings that indicate controlling shareholders’ expropriation of minority shareholders. More severe comment letters are associated with a lower market response to the receipt of letters, predict a higher probability of voluntary deal cancellation by management, and indirectly increase the probability of deal withdrawal and lengthen the processing time for equity-funded deals by affecting the approving body’s scrutiny level.

Handing off the outcome of binary neutron star mergers for accurate and long-term postmerger simulations

We perform binary neutron star (BNS) merger simulations in full dynamical general relativity with IllinoisGRMHD, on a Cartesian grid with adaptive-mesh refinement. After the remnant black hole has become nearly stationary, the evolution of the surrounding accretion disk on Cartesian grids over long timescales (1s) is suboptimal, as Cartesian coordinates over-resolve the angular coordinates at large distances, and the accreting plasma flows obliquely across coordinate lines dissipating angular momentum artificially from the disk. To address this, we present the Handoff, a set of computational tools that enables the transfer of general relativistic magnetohydrodynamic (GRMHD) and spacetime data from IllinoisGRMHD to HARM3D, a GRMHD code that specializes in modeling black hole accretion disks in static spacetimes over long timescales, making use of general coordinate systems with spherical topology. We demonstrate that the Handoff allows for a smooth and reliable transition of GRMHD fields and spacetime data, enabling us to efficiently and reliably evolve BNS dynamics well beyond merger. We also discuss future plans, which involve incorporating advanced equations of state and neutrino physics into BNS simulations using the \handoff approach.