Determinant and impact of disclosure in merger and acquisition transactions

Merger and acquisition (M&A) is one of the expansion strategies commonly taken by companies. There are several reasons behind the M&A management decisions. This study separates the M&A motives categories into two major groups, namely synergy and agency, using stock market data. This study aims to examine the effect of M&A motives categories on the level of disclosure in M&A transactions in terms of the company’s financial statements. In addition, this study also investigates the impact of the level of M&A disclosure on corporate performance in the long term post-M&A. Cross-sectional regression analysis is conducted on the M&A sample cases that occurred in some Asian countries. The analysis results indicate that the disclosure level for M&A with synergy motives is significantly higher than agency motives. However, this study does not provide supporting evidence regarding the effect of the level of disclosure on long-term corporate performance post-M&A.