The Choice of Payment Method in European Mergers and Acquisitions - The Aftermath of the Financial Crisis
Abstract: We study the choice of payment method of European bidders' in the wake of the financial crisis from 1st of august 2007 till 31st of august 2013. We observe a decrease in the proportion of cash payments after the epicenter of the financial crisis. Firm and deal characteristics are found to be largely important for the choice of payment method, corroborating previous research. Our results show that adverse selection and financial constraints are important factors for bidders' when choosing payment method in M&As. We find differences in the choice of payment method between Europe and North America, comparing our results to previous studies of M&A activity in North America.
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