Examining Acquisition Failure: Understanding Antecedents and Consequences of Acquisition Deal Failures

Abstract

This dissertation takes a learning approach towards Mergers and Acquisitions in the context of deal failure and the role of CEO characteristics in the pre-completion phase of mergers and acquisitions. Six primary research questions are explored in detail, including 1) In what ways do CEO level acquisition experiences predict deal failure?; 2) In what ways do quality of such experiences as measured by experience diversity aid the firms in completing the acquisition?; 3) In what ways do the experiences of target firm CEOs interact with acquiring firm CEOs to predict deal failure?; 4) What do firms do after initial attempts to acquisition fail?; 5) In what ways do CEO characteristics interact with deal failure to predict future strategic choices?; 6) What are the boundary conditions of CEO’s responses to deal failures? The primary goal of this study is two-fold. One, to better understand how individual level experiences of both acquiring firm and target firm CEOs interact to effect the likelihood of deal failure. And second, to examine the role of CEO characteristics and personality to explain variance in strategic choices following a deal failure. Emanating from strategic management literature, the Upper Echelons perspective and Organizational Learning perspective serve as the two primary theoretical frameworks used in this study. In addition to the above mentioned frameworks, theories from social status and social psychology literatures are incorporated to gain a greater understanding of the modeled relationships as well as how they unfold in different context.