No. 55: What are the effects of strategy consultants, financial, and legal M&A advisors on M&A success?

Abstract

This paper empirically evaluates the effects of various merger and acquisition (M&A) advisors on perceived M&A success by using survey data from M&A experts around the globe. The dataset includes three different M&A advisor types including legal/tax/audit advisors, financial advisors, and, most importantly, strategy consultants. In addition, we are able to employ a comprehensive control framework that considers the functional setup of the M&A organization of firms, e.g., whether M&A activities are organized at the headquarters or at the business unit level. Our main results show that, ceteris paribus, strategy consultants increase M&A success by up to 3.7%, thereby exceeding benefits from other M&A advisors, such as financial advisors by more than one percentage point. Finally, M&A success is improved the most if M&A advisors are hired regularly. The effects from the M&A advisors are partially mediated by the M&A process standardization channel.

Participating Institutions

TRR 266‘s main locations are Paderborn University (Coordinating University), HU Berlin, and University of Mannheim. All three locations have been centers for accounting and tax research for many years. They are joined by researchers from LMU Munich, Frankfurt School of Finance and Management, WHU – Otto Beisheim School of Management, ESMT Berlin and Goethe University Frankfurt who share the same research agenda.