A combined firm's decision to hire the target's financial advisor after acquisition: Does “service excellence” pay off?

Debarati Bhattacharya, Shih Che Hsu, Wei Hsien Li, Chun Ting Liu

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

This paper explores three reasons why after the completion of an M&A deal, the combined firm chooses to hire the target's financial advisor, with whom the acquiring firm has no prior relationship. We find that the likelihood of hiring the target's advisor improves when it provides superior service to the target, if it is a reputable investment bank or when the target's management is more likely to be retained by the combined firm. Our evidence suggests that the “service excellence” demonstrated by investment banks is valuable not only for enhancing their ongoing business relationships, but also for securing future business.

Original languageEnglish
Pages (from-to)297-302
Number of pages6
JournalFinance Research Letters
Volume29
DOIs
StatePublished - Jun 2019

Keywords

  • Financial advisors
  • M&As

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