Corporate Value Creation through Mergers and Acquisitions
Article Sidebar
Main Article Content
Abstract
This paper examines the relationship between mergers and acquisitions (M&A), corporate value creation, and restructuring by synthesizing recent contributions addressing shareholder wealth, operating performance, governance, integration, innovation, divestiture, financial distress, and stakeholder considerations. The literature indicates that M&A outcomes cannot be evaluated exclusively through announcement returns because realized value depends on transaction pricing, financing conditions, managerial capabilities, governance mechanisms, integration processes, and the institutional environment. Acquisitions can create value through operating synergies, financial-resource reallocation, technological renewal, organizational learning, and access to complementary capabilities, but these benefits remain conditional on firms’ capacity to select appropriate targets and manage post-acquisition restructuring. The literature also shows that divestitures, asset sales, spin-offs, and bankruptcy-related restructuring constitute complementary mechanisms through which firms reallocate resources and modify organizational boundaries. More recent contributions extend the analysis beyond shareholder wealth by incorporating environmental, social, and governance considerations and broader stakeholder relationships. Overall, the review suggests that corporate restructuring should be understood as a multidimensional process in which financial, organizational, technological, institutional, and stakeholder mechanisms jointly determine whether changes in corporate control generate sustainable economic value.
Article Details
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
References
1. Adhikari, H. P., & Sutton, N. K. (2016). All in the family: The effect of family ownership on acquisition performance. Journal of Economics and Business, 88, 65–78. DOI: 10.1016/j.jeconbus.2016.08.001.
2. Agyei-Boapeah, H., Fosu, S., & Ntim, C. G. (2020). Corporate multinationality and acquirer returns. Abacus, 56(2), 230–267. DOI: 10.1111/abac.12146.
3. Ahmad, M. F., Aktas, N., Cumming, D., & Xu, G. (2024). Board reforms and M&A perfor-mance: International evidence. Journal of International Business Studies, 55, 616–637. DOI: 10.1057/s41267-023-00674-3.
4. Akpan, M., Wanke, P., Chen, Z., & Antunes, J. M. (2020). Unveiling the endogenous relation-ship between technical efficiency and value creation in mergers and acquisitions in Nigeria. South African Journal of Economics, 88(1), 40–70. DOI: 10.1111/saje.12233.
5. Aktas, N., Baros, A., & Croci, E. (2022). Corporate divestitures around acquisitions. Journal of Corporate Finance, 73, Article 102189. DOI: 10.1016/j.jcorpfin.2022.102189.
6. Alexandridis, G., Antypas, N., & Travlos, N. (2017). Value creation from M&As: New evidence. Journal of Corporate Finance, 45, 632–650. DOI: 10.1016/j.jcorpfin.2017.05.010.
7. Alhenawi, Y., & Stilwell, M. (2017). Value creation and probability of success in merger and acquisition transactions. Review of Quantitative Finance and Accounting, 49(4), 1041–1085. DOI: 10.1007/s11156-017-0616-2.
8. Alimov, A., & Officer, M. S. (2017). Intellectual property rights and cross-border mergers and acquisitions. Journal of Corporate Finance, 45, 360–377. DOI: 10.1016/j.jcorpfin.2017.05.015.
9. Arts, S., Cassiman, B., & Hou, J. (2025). Technology differentiation, product market rivalry, and M&A transactions. Strategic Management Journal, 46(4), 837–862. DOI: 10.1002/smj.3687.
10. Arvanitis, S., & Stucki, T. (2015). Do mergers and acquisitions among small and medium-sized enterprises affect the performance of acquiring firms? International Small Business Journal, 33(7), 752–773. DOI: 10.1177/0266242614522280.
11. Basuil, D. A., & Datta, D. K. (2015). Effects of industry- and region-specific acquisition expe-rience on value creation in cross-border acquisitions: The moderating role of cultural similari-ty. Journal of Management Studies, 52(6), 766–795. DOI: 10.1111/joms.12128.
12. Bauer, F., Schriber, S., Degischer, D., & King, D. R. (2018). Contextualizing speed and cross-border acquisition performance: Labor market flexibility and efficiency effects. Journal of World Business, 53(2), 290–301. DOI: 10.1016/j.jwb.2018.01.001.
13. Becher, D. A., Jensen, T. K., & Liu, T. (2020). Acquisitions and funding conditions. Journal of Corporate Finance, 65, Article 101760. DOI: 10.1016/j.jcorpfin.2020.101760.
14. Bettinazzi, E. L. M., & Zollo, M. (2017). Stakeholder orientation and acquisition performance. Strategic Management Journal, 38(12), 2465–2485. DOI: 10.1002/smj.2672.
15. Brahma, S., Boateng, A., & Ahmad, S. (2023). Board overconfidence and M&A performance: Evidence from the UK. Review of Quantitative Finance and Accounting, 60, 1363–1391. DOI: 10.1007/s11156-023-01133-8.
16. Cefis, E., & Marsili, O. (2015). Crossing the innovation threshold through mergers and acqui-sitions. Research Policy, 44(3), 698–710. DOI: 10.1016/j.respol.2014.10.010.
17. Chalençon, L., Colovic, A., Lamotte, O., & Mayrhofer, U. (2017). Reputation, e-reputation, and value-creation of mergers and acquisitions. International Studies of Management & Organiza-tion, 47(1), 4–22. DOI: 10.1080/00208825.2017.1241086.
18. Chen, I.-J., Hsu, P.-H., Officer, M. S., & Wang, Y. (2020). The Oscar goes to…: High-tech firms’ acquisitions in response to rivals’ technology breakthroughs. Research Policy, 49(7), Article 104078. DOI: 10.1016/j.respol.2020.104078.
19. Chen, S.-S., & Lin, C.-Y. (2018). Managerial ability and acquirer returns. The Quarterly Re-view of Economics and Finance, 68, 171–182. DOI: 10.1016/j.qref.2017.09.004.
20. Cheng, P., Li, L., & Tong, W. H. S. (2016). Target information asymmetry and acquisition price. Journal of Business Finance & Accounting, 43, 976–1016. DOI: 10.1111/jbfa.12202.
21. Cho, K., Han, S. H., Kim, H. J., & Kim, S. (2021). The valuation effects of corporate social re-sponsibility on mergers and acquisitions: Evidence from U.S. target firms. Corporate Social Responsibility and Environmental Management, 28(1), 378–388. DOI: 10.1002/csr.2055.
22. Chou, H.-I., Tian, G. Y., & Yin, X. (2015). Takeover rumors: Returns and pricing of rumored targets. International Review of Financial Analysis, 41, 13–27. DOI: 10.1016/j.irfa.2015.05.006.
23. Christofi, M., Vrontis, D., Thrassou, A., & Shams, S. M. R. (2019). Triggering technological in-novation through cross-border mergers and acquisitions: A micro-foundational perspective. Technological Forecasting and Social Change, 146, 148–166. DOI: 10.1016/j.techfore.2019.05.026.
24. Datta, P., & Roumani, Y. (2015). Knowledge-acquisitions and post-acquisition innovation performance: A comparative hazards model. European Journal of Information Systems, 24(2), 202–226. DOI: 10.1057/ejis.2014.32.
25. de Bodt, E., Cousin, J.-G., & Roll, R. (2018). Full-stock-payment marginalization in merger and acquisition transactions. Management Science, 64(2), 760–783. DOI: 10.1287/mnsc.2016.2635.
26. Dissanaike, G., Drobetz, W., & Momtaz, P. P. (2020). Competition policy and the profitability of corporate acquisitions. Journal of Corporate Finance, 62, Article 101510. DOI: 10.1016/j.jcorpfin.2019.101510.
27. Doan, T. T. (2020). Setting the “right” goal: Post M&A innovation performance and goal ori-entation. Business: Theory and Practice, 21(2), 555–565. DOI: 10.3846/btp.2020.12083.
28. Du, M., Boateng, A., & Newton, D. (2016). The impact of state ownership, formal institutions and resource seeking on acquirers’ returns of Chinese M&A. Review of Quantitative Finance and Accounting, 47(1), 159–178. DOI: 10.1007/s11156-015-0498-0.
29. Ferris, S. P., & Sainani, S. (2021). Do CFOs matter? Evidence from the M&A process. Journal of Corporate Finance, 67, Article 101856. DOI: 10.1016/j.jcorpfin.2020.101856.
30. Fich, E. M., & Nguyen, T. (2020). The value of CEOs’ supply chain experience: Evidence from mergers and acquisitions. Journal of Corporate Finance, 60, Article 101525. DOI: 10.1016/j.jcorpfin.2019.101525.
31. Field, L. C., & Mkrtchyan, A. (2017). The effect of director experience on acquisition perfor-mance. Journal of Financial Economics, 123(3), 488–511. DOI: 10.1016/j.jfineco.2016.12.001.
32. Fisch, C., Block, J., & Sandner, P. (2019). The impact of acquisitions on Chinese acquirers’ in-novation performance: An empirical investigation of 1545 Chinese acquisitions. Journal of Business Economics, 89, 125–153. DOI: 10.1007/s11573-018-0905-9.
33. Ganzaroli, A., & Orsi, L. (2016). The combined effect of technological relatedness and knowledge utilization on explorative and exploitative invention performance post-M&A. Eu-ropean Journal of Innovation Management, 19(2), 167–188. DOI: 10.1108/EJIM-08-2014-0092.
34. Gerpott, T. J., & Neubauer, F. B. (2016). Post-acquisition integration management and takeo-ver performance: A comprehensive empirical study of a German transaction from the em-ployee perspective. Journal of General Management, 41(4), 3–34. DOI: 10.1177/030630701604100402.
35. Golubov, A., & Xiong, N. (2020). Post-acquisition performance of private acquirers. Journal of Corporate Finance, 60, Article 101545. DOI: 10.1016/j.jcorpfin.2019.101545.
36. Golubov, A., Yawson, A., & Zhang, H. (2015). Extraordinary acquirers. Journal of Financial Economics, 116(2), 314–330. DOI: 10.1016/j.jfineco.2015.02.005.
37. Hege, U., Lovo, S., Slovin, M. B., & Sushka, M. E. (2018). Divisional buyouts by private equity and the market for divested assets. Journal of Corporate Finance, 53, 21–37. DOI: 10.1016/j.jcorpfin.2018.08.016.
38. Hsu, P.-H., Huang, P., Humphery-Jenner, M., & Powell, R. (2021). Cross-border mergers and acquisitions for innovation. Journal of International Money and Finance, 112, Article 102320. DOI: 10.1016/j.jimonfin.2020.102320.
39. Huang, P., Officer, M. S., & Powell, R. (2016). Method of payment and risk mitigation in cross-border mergers and acquisitions. Journal of Corporate Finance, 40, 216–234. DOI: 10.1016/j.jcorpfin.2016.08.006.
40. Huang, Z., Zhu, H., & Brass, D. J. (2017). Cross-border acquisitions and the asymmetric effect of power distance value difference on long-term post-acquisition performance. Strategic Management Journal, 38(4), 972–991. DOI: 10.1002/smj.2530.
41. Jaffe, J., Jindra, J., Pedersen, D., & Voetmann, T. (2015). Returns to acquirers of public and subsidiary targets. Journal of Corporate Finance, 31, 246–270. DOI: 10.1016/j.jcorpfin.2015.02.005.
42. James, S. D. (2016). Strategic bankruptcy: A stakeholder management perspective. Journal of Business Research, 69(2), 492–499. DOI: 10.1016/j.jbusres.2015.05.006.
43. Jenter, D., & Lewellen, K. (2015). CEO preferences and acquisitions. The Journal of Finance, 70(6), 2813–2852. DOI: 10.1111/jofi.12283.
44. Jindra, J., & Moeller, T. (2015). Target financial independence and takeover pricing. Journal of Financial Research, 38(3), 379–413. DOI: 10.1111/jfir.12064.
45. Jost, S., Erben, S., Ottenstein, P., & Zülch, H. (2022). Does corporate social responsibility im-pact mergers & acquisition premia? New international evidence. Finance Research Letters, 46, Article 102237. DOI: 10.1016/j.frl.2021.102237.
46. Kedia, B. L., & Reddy, R. K. (2016). Language and cross-border acquisitions: An exploratory study. International Business Review, 25(6), 1321–1332. DOI: 10.1016/j.ibusrev.2016.04.004.
47. Kiesel, F., Ries, J. M., & Tielmann, A. (2017). The impact of mergers and acquisitions on shareholders’ wealth in the logistics service industry. International Journal of Production Economics, 193, 781–797. DOI: 10.1016/j.ijpe.2017.09.006.
48. Kolev, K. D. (2016). To divest or not to divest: A meta-analysis of the antecedents of corpo-rate divestitures. British Journal of Management, 27(1), 179–196. DOI: 10.1111/1467-8551.12145.
49. Krishnamurti, C., Shams, S., Pensiero, D., & Velayutham, E. (2019). Socially responsible firms and mergers and acquisitions performance: Australian evidence. Pacific-Basin Finance Jour-nal, 57, Article 101193. DOI: 10.1016/j.pacfin.2019.101193.
50. Lamont, B. T., King, D. R., Maslach, D. J., Schwerdtfeger, M., & Tienari, J. (2019). Integration capacity and knowledge-based acquisition performance. R&D Management, 49(1), 103–114. DOI: 10.1111/radm.12336.
51. Leitterstorf, M. P., & Wachter, M. M. (2016). Takeover premiums and family blockholders. Family Business Review, 29(2), 214–230. DOI: 10.1177/0894486515622721.
52. Li, J., Li, P., & Wang, B. (2016). Do cross-border acquisitions create value? Evidence from overseas acquisitions by Chinese firms. International Business Review, 25(2), 471–483. DOI: 10.1016/j.ibusrev.2015.08.003.
53. Liu, Y.-C., Chen, H.-J., & Su, M.-C. (2017). Product market competition, type of mergers, and post-merger performance in Taiwan. Pacific-Basin Finance Journal, 46, 292–308. DOI: 10.1016/j.pacfin.2017.10.001.
54. Malmendier, U., Moretti, E., & Peters, F. S. (2018). Winning by losing: Evidence on the long-run effects of mergers. The Review of Financial Studies, 31(8), 3212–3264. DOI: 10.1093/rfs/hhy009.
55. Mavis, C. P., McNamee, N. P., Petmezas, D., & Travlos, N. G. (2020). Selling to buy: Asset sales and acquisitions. Journal of Corporate Finance, 62, Article 101587. DOI: 10.1016/j.jcorpfin.2020.101587.
56. Nishihara, M., & Shibata, T. (2016). Asset sale, debt restructuring, and liquidation. Journal of Economic Dynamics and Control, 67, 73–92. DOI: 10.1016/j.jedc.2016.03.011.
57. Oh, S. (2018). Fire-sale acquisitions and intra-industry contagion. Journal of Corporate Fi-nance, 50, 265–293. DOI: 10.1016/j.jcorpfin.2018.04.001.
58. Papadimitri, P., Staikouras, P., Travlos, N. G., & Tsoumas, C. (2019). Punished banks’ acquisi-tions: Evidence from the U.S. banking industry. Journal of Corporate Finance, 58, 744–764. DOI: 10.1016/j.jcorpfin.2019.07.014.
59. Pickering, M. E. (2017). Post-acquisition integration processes in publicly owned professional service companies: Senior professional behaviour and company performance. Journal of Or-ganizational Behavior, 38, 950–976. DOI: 10.1002/job.2173.
60. Popli, M., Akbar, M., Kumar, V., & Gaur, A. (2016). Reconceptualizing cultural distance: The role of cultural experience reserve in cross-border acquisitions. Journal of World Business, 51(3), 404–412. DOI: 10.1016/j.jwb.2015.11.003.
61. Sears, J. B. (2018). Post-acquisition integrative versus independent innovation: A story of du-eling success factors. Research Policy, 47(9), 1688–1699. DOI: 10.1016/j.respol.2018.06.003.
62. Stiebale, J. (2016). Cross-border M&As and innovative activity of acquiring and target firms. Journal of International Economics, 99, 1–15. DOI: 10.1016/j.jinteco.2015.12.005.
63. Tampakoudis, I., & Anagnostopoulou, E. (2020). The effect of mergers and acquisitions on environmental, social and governance performance and market value: Evidence from EU ac-quirers. Business Strategy and the Environment, 29, 1865–1875. DOI: 10.1002/bse.2475.
64. Tao, F., Liu, X., Gao, L., & Xia, E. (2017). Do cross-border mergers and acquisitions increase short-term market performance? The case of Chinese firms. International Business Review, 26(1), 189–202. DOI: 10.1016/j.ibusrev.2016.06.006.
65. Tarba, S. Y., Ahammad, M. F., Junni, P., Stokes, P., & Morag, O. (2019). The impact of organi-zational culture differences, synergy potential, and autonomy granted to the acquired high-tech firms on the M&A performance. Group & Organization Management, 44(3), 483–520. DOI: 10.1177/1059601117703267.
66. Teerikangas, S., & Thanos, I. C. (2018). Looking into the “black box” – Unlocking the effect of integration on acquisition performance. European Management Journal, 36(3), 366–380. DOI: 10.1016/j.emj.2017.06.002.
67. To, T., Wu, E., & Zhao, D. (2024). Global board reforms and corporate acquisition perfor-mance. Journal of Corporate Finance, 87, Article 102617. DOI: 10.1016/j.jcorpfin.2024.102617.
68. Ushijima, T., & Iriyama, A. (2015). The roles of closure and selloff in corporate restructuring. Journal of the Japanese and International Economies, 38, 73–92. DOI: 10.1016/j.jjie.2015.05.007.
69. Vidal, E., & Mitchell, W. (2015). Adding by subtracting: The relationship between perfor-mance feedback and resource reconfiguration through divestitures. Organization Science, 26(4), 1101–1118. DOI: 10.1287/orsc.2015.0981.
70. Williamson, R., & Yang, J. (2021). Tapping into financial synergies: Alleviating financial con-straints through acquisitions. Journal of Corporate Finance, 68, Article 101947. DOI: 10.1016/j.jcorpfin.2021.101947.
71. Wullenweber, M. (2025). Is corporate social responsibility a driver for target selection in mergers and acquisitions? The role of horizontal versus diversifying motives. Corporate Social Responsibility and Environmental Management, 32(4), 4448–4461. DOI: 10.1002/csr.3199.
72. Xu, Y., Xu, N., Chan, K. C., & Li, Z. (2021). Generalists vs. specialists: Who are better acquir-ers? Journal of Corporate Finance, 67, Article 101915. DOI: 10.1016/j.jcorpfin.2021.101915.
73. Yang, J., Guariglia, A., & Guo, J. (2019). To what extent does corporate liquidity affect M&A decisions, method of payment and performance? Evidence from China. Journal of Corporate Finance, 54, 128–152. DOI: 10.1016/j.jcorpfin.2017.09.012.
74. Zhang, C., Kandilov, I. T., & Walker, M. D. (2021). Direct flights and cross-border mergers & acquisitions. Journal of Corporate Finance, 70, Article 102063. DOI: 10.1016/j.jcorpfin.2021.102063.
75. Zheng, Z., Li, J., Ren, X., & Guo, J. M. (2023). Does corporate ESG create value? New evidence from M&As in China. Pacific-Basin Finance Journal, 77, Article 101916. DOI: 10.1016/j.pacfin.2022.101916.