Bank Dependence and Bank Financing in Corporate M&A

• 成果类型: Article
• 署名作者: Huang, Sheng; Lu, Ruichang; Srinivasan, Anand
• 署名单位: China Europe International Business School; Peking University; National University of Singapore
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2020.3947
• 发表日期: 2022
• 页码: 2250-2283
• 关键词: bank dependence; M&A; Bank financing; creditor monitoring

摘要

We examine the valuation impact of bank-financed mergers and acquisitions (M&As) and the loan contracts used to finance M&A transactions, focusing on the difference between bank-dependent acquirers and other acquirers. We find that bankfinanced deals have higher acquirer's cumulative abnormal returns relative to other cash M&A deals, but this certification effect exists only for bank-dependent acquirers. Despite bank-dependent acquirers being more susceptible to hold-up, banks do not impose higher loan pricing or more stringent nonprice terms on them. After completion of the acquisition, bank-dependent acquirers retain the M&A financing banks for a much larger share of their borrowing needs, suggesting the importance of repeat business for lack of hold-up. Our findings highlight the positive aspects of bank dependence and the importance of implicit contracting for the lack of hold-up in lending markets.