Customer concentration of targets in mergers and acquisitions

Mei Cheng, Jacob Jaggi, Spencer Young

Research output: Contribution to journalArticlepeer-review

Abstract

We study how the customer concentration of targets impacts the occurrence and structure of mergers and acquisitions (M&A). We hypothesize and find that acquirers respond to customer concentration-related risk by placing fewer bids for targets with greater customer concentration and by using more stock payment in their offers. These relations vary predictably with major customer-related uncertainty. Our findings extend the literature by documenting an important risk factor in M&A and by quantifying the economic consequences of customer concentration.

Original languageEnglish (US)
JournalJournal of Business Finance and Accounting
DOIs
StateAccepted/In press - 2021
Externally publishedYes

ASJC Scopus subject areas

  • Accounting
  • Business, Management and Accounting (miscellaneous)
  • Finance

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