Archive for October 21st, 2009

Is there a link between the arrival of a new CEO and M&A deals?

Posted on Wednesday, 21 October 2009. Filed under: Commentary, Mergers |

A significant driver to M&A activity is the relatively short tenure of CEOs as chief executive.

At the M&A Research Centre at Cass Business School, we have been looking at the link between CEO changes and M&A deals, whether acquisitions or divestitures.  We aren’t ready yet with the final analysis (being part of a highly rated business school does mean that we have standards of research that exceed many others and therefore needs appropriate review before being released).  But as a teaser, we have found in the preliminary research that the typical CEO doing a big deal announces his first major acquisition in well under a year and, interestingly, that announcement usually precedes the announcement of his or her first big divestiture.  I certainly found it interesting that the CEO embarks on the first steps of his or her new vision before starting to unwind the previous CEO’s organisation!

Stay tuned here, as we expect to have these results soon.

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