The role of timing in a merger wave on overcoming challenges in the M&A pre-merger process

This paper investigates two important issues in the pre-merger process, namely the probability to complete an announced M&A deal and the time needed to complete the process. First, through a content analysis of the 150 largest abandoned announced M&A deals between 2000 and 2010, we demonstrate that defense from the target, competing bidders, regulatory concerns, and acquirer opposition are major roadblocks that firms might face during the pre- merger process. Moreover, these hurdles can jointly occur, creating cumulative difficulties for firms and managers in completing the deal. Second, we suggest that these roadblocks might vary depending on the timing of an M&A announcement in a merger wave. Therefore, the likelihood of completing an announced M&A deal and the duration of the pre-merger process can be affected by the timing of the transaction in the wave. With a sample of 2,802 announced M&As across four industry waves, we find that the sooner an M&A deal is announced in a merger wave, the higher the likelihood that the deal will be completed. Moreover, our analyses indicate that acquisition deals announced late in a wave experience a longer pre- merger deal-making process.