Determinants of method of payment in mergers and acquisitions and their agency implications

Abstract

This study is expected to be useful to industry regulators like competition authorities, tax collection agencies and capital market regulators as it will provide some insight for deeper scrutiny of proposed mergers and acquisitions to ensure both parties in the transaction obtain a fair value by mitigating effects of infonnation asymmetry. It could inform future regulation with respect to M&Apractices in Kenya and Africa.Investmentbankersand other transactional advisors could benefit from this study. They provide advisory serv.ices to acquirers and targets in Africa, and this study and others like it will enable them to understand and antic.ipate their clients' ideal M&A structure on a deeper level. Also, shareholders and managers of companies that anticipate M&As involving their companies will obtain a different perspective of the thought process of their prospective counterpoises as they determine the method of payment to use and the implications of the chosen method on theh companies' operations and marl<:et performance. Finally, I hope this study inspires future academic studies aboutM&As in Africa