Determinants | Interdependency | Theoretical background | |
DAX and M&A success | - | Advantages of anticyclical behavior | Disadvantages of procyclical behavior |
· Lower absolute purchase price · Information hypothesis · Low interest on borrowed capital ® leverage hypothesis · First mover advantage · Purchasing companies have more bargaining power in relation to the transaction premium because of the lower level of bidding competition ® “winner’s curse” hypothesis · More pressure on target companies to act because of competition or financial difficulties · Detailed due diligence | · Higher absolute purchase price · “Herd behavior” · Inflated transactions premiums because of higher demand for target companies · Greater use of shares as a transaction currency because of information asymmetries (signaling effect) ® information hypothesis · A lack of due diligence |