The role of equity underwriting relationships in mergers and acquisitions
Journal
Pacific Basin Finance Journal
Journal Volume
64
Date Issued
2020
Author(s)
Abstract
We examine the role of equity underwriting relationships in subsequent mergers and acquisitions (M&As). Firms, either the bidders or targets, tend to choose their M&A advisors with prior equity underwriting relationships. Consistent with the cost-saving hypothesis, retaining their prior underwriters as future advisors is related to cost reduction in the M&A advisory. Firms also experience shorter deal duration if they hire relationship advisors. This study contributes to the further understanding of how firms derive value from investment bank relationships. ? 2020 Elsevier B.V.
Type
journal article