Slow but Certain: The Pre-M&A Process of European National Champion Deals

Abstract

This study investigates the effect of national champion strategies on the length of the pre-M&A process in Europe. The policy strategy of creating so-called “national champions,” that is, promoting national rather than international mergers, is often the focus of European policy debate. If European governments support national champion M&A activities, we would expect that national champion M&A deals have an accelerated pre-M&A process at the European Commission (EU) relative to comparable European M&A deals. To empirically test this proposition, we compare national champion M&A under scrutiny by the EU to similar deals in terms of industry and firm characteristics in the period 1997–2010. In contrast to our expectation, national champion M&As face a longer pre-M&A process than other comparable European M&As. However, evidence indicates that national champion M&As are almost always completed successfully while comparable European M&As are often derailed in process.

Citation

Booij, M. and Rao Sahib, P. (2012), "Slow but Certain: The Pre-M&A Process of European National Champion Deals", Finkelstein, S. and Cooper, C.L. (Ed.) Advances in Mergers and Acquisitions (Advances in Mergers and Acquisitions, Vol. 11), Emerald Group Publishing Limited, Leeds, pp. 55-68. https://doi.org/10.1108/S1479-361X(2012)0000011006