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Effects Of Corporate Cultural Distance On Private Company M&A Outcomes, Court Carruthers

Theses and Dissertations

Despite nearly $5 trillion of annual global merger and acquisition (M&A) activity, the degree of shareholder value created by M&A remains a topic of debate. The historical view is that M&A does not increase value for acquiring firms, however recent public company financial research suggests that returns are highly variable, rather than uniformly negative. Cultural differences between acquiring and acquired companies, or corporate cultural distance (CCD), are noted as a potential cause of this variability, however, public company findings remain inconclusive. Although private equity (PE) is responsible for approximately 20% of annual M&A transaction value, nearly all prior research is …