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Accounting Firms in the European M&A Advisory Market

Bilinski, P. ORCID: 0000-0002-0499-6429 and Yim, A. ORCID: 0000-0002-8063-6572 (2021). Accounting Firms in the European M&A Advisory Market. British Journal of Management,

Abstract

Building on the knowledge-based view of the resource-based theory, we propose that accounting firms leverage the industry expertise acquired from the audits of the targets’ industries to produce fairer target valuations on merger and acquisitions (M&As). The accounting expertise competitive advantage explains why bidders choose accounting firms, rather than investment banks, to advise on transactions where the likelihood of overpaying for a target is high. We document that for such deals, acquirer announcement returns are higher and offer premia are lower if the bidders are advised by accounting firms that are audit specialists in the targets’industries. Our results explain why accounting firms are listed among top ten M&A financial advisors in the European Thomson Reuters and Mergermarket league tables.

Publication Type: Article
Additional Information: This is the peer reviewed version of the following article: Bilinski, Pawel and Yim, Andrew (2021). Accounting Firms in the European M&A Advisory Market. British Journal of Management, whichis to be published in final form at http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-8551. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.
Publisher Keywords: accounting firms, financial advisors, hard-to-value targets, mergers and acquisitions, knowledge-based view, resource-based theory
Subjects: H Social Sciences > HG Finance
J Political Science > JN Political institutions (Europe)
Departments: Bayes Business School > Finance
Date available in CRO: 09 Nov 2021 08:48
Date deposited: 9 November 2021
Date of acceptance: 2 November 2021
URI: https://openaccess.city.ac.uk/id/eprint/27079
[img] Text - Accepted Version
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