Measuring the Quality of Mergers and Acquisitions
基于会计理论提出并购质量指标IRI，衡量收购方为保本所需的最低ROE改善，发现高IRI并购事后更难实现且预测更差的财务表现，与CEO过度自信、激励错配和协同效应高估相关。
We develop a measure of merger and acquisition (M&A) quality using accounting theory. This measure, implied return-on-equity improvement (IRI), quantifies the minimum improvement in the target’s post-acquisition return on equity (ROE) the acquirer must attain to break even on the acquisition price. Employing a large sample of M&As from 1980 to 2018, we find that a high IRI is, on average, less attainable ex post and predicts worse acquirer financial performance. The acquirer’s ROE growth over the first three years after the M&A is 11 percentage points lower for high-IRI M&As compared with low-IRI M&As. Worse high-IRI acquirer performance is observable through higher operating costs, tighter financial constraints, lower investments, and larger and more frequent goodwill impairments. We also find that IRI increases with acquiring chief executive officers’ overconfidence, incentive misalignment, and difficulty in estimating synergies; IRI decreases with acquirers’ financial discipline and due diligence effort. As such, overestimating synergies and managerial incentives that drive overpayment are potential mechanisms underlying IRI’s negative association with acquirers’ post-M&A performance. This paper was accepted by Eric So, accounting. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2023.01225 .