Why are so many Mergers and Acquisitions cancelled?

Thomas Lindner, together with Jakob Müllner and Harald Puhr, has published a research paper in the Global Strategy Journal. The paper explores how providers of equity and debt capital interfere with announced mergers and acquisitions, and how the institutional environments in cross-border M&As influence how capital providers see mergers and acquisitions.


An acquisition is a highly consequential negotiation process between managers and capital providers of a firm. Based on their evaluation of a potential deal, managers propose acquisitions to capital providers who either accept it or pressure managers into withdrawing from the announced deal. This study considers firms' capital structure and cross-national differences in the governing institutions to explain the resistance of capital providers against announced acquisitions. In particular, it points to the fear of capital providers losing control of their firms as a driver of their resistance against cross-border acquisitions. However, when a favorable capital-market structure in the target's home country alleviates the fears of capital providers, their resistance weakens. LINK