Determinants of the Payment Methods in Mergers and Acquisitions

Abstract

The aim of this thesis is to investigate the determinants of mergers and acquisitions method of payment in the US in the 2003-2019 period. The relationships between firm and deal characteristics as well as macroeconomic variables and the method of payment in M&A deals in the US are analyzed. The results from Ordered Probit models and Tobit models show that excess cash of acquirer and firm size acquirer are positively related to cash payment and increase the likelihood of cash payment while public acquirer, acquirer’s investment opportunity, acquirer’s management control, stock performance, collateral assets, relative deal size and financial crisis decrease the likelihood of cash payment.