Mergers and acquisitions' survival dynamics and the drivers of deal completion in emerging economies (Revista Contabilidade & Finanças)

Summary

• The study analyzes 15,376 corporate M&A transactions announced by publicly listed acquiring firms across nine emerging economies between 2002 and 2021.p.3
• Completed M&A transactions in the sample exhibit an average duration of 149 days and a median duration of 59 days.p.18
• Pending deals represent 29.01% of the sample with an average duration of 1,866 days, while abandoned deals constitute 20.03% with an average duration of 2,351 days.p.19
• Non-parametric Kaplan-Meier survival analysis shows that the cumulative population probability of deal completion reaches 50% at 523 days.p.20

Key insights

1. Pre-acquisition negotiations display negative duration dependence, meaning the probability of closing an M&A deal diminishes the longer it remains pending.p.22
2. Larger acquirer firm size negatively impacts the deal completion rate, with a one-unit increase in log total assets reducing the completion hazard rate by 1.8%.p.22
3. Higher real interest rates accelerate M&A completion speeds, as shown by a statistically significant hazard ratio of 1.016.p.22
4. Transactions announced during positive pro-market economic freedom reforms experience a 13.9% increase in the likelihood of deal completion.p.24
5. Cross-border M&A deals close faster than domestic transactions, showing a 68.88% reduction in completion time under the accelerated failure time model.p.25
6. Target firm distress accelerates transaction execution, with bankrupt targets reducing deal completion time by 130.40%.p.25