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Global: War of the sexes – who wins at M&A negotiations?

 |  November 26, 2013

A study conducted by researchers at the University of British Columbia’s Sauder School of Business is sure to spark debate as it claims women are better at negotiating mergers and acquisitions for their companies than men are.

The study, “Director Gender and Mergers and Acquisitions,” analyzed buyout bids made between 1997 and 2009 by S&P 1500 companies. According to reports, the study found that the cost of a successful buyout decreases by 15.4 percent for every female director that sits on a company’s board.

Further, the paper found that for every female director, a company’s number of attempted acquisitions reduces by 7.6 percent.

According to co-author Kai Li, female directors “play a significant role in mitigating the empire-building tendency of CEOs through the acquisition of other companies.”

”On average, merger and acquisition transactions don’t create shareholder value, so women are having a real impact in protecting shareholder investment and overall firm performance,” he said.

The study suggests female board directors are less interested than their male counterparts in risky mergers, and require a higher chance of a successful bid.

The research seems to support recent call for a mandatory, minimum number of female directors on publically traded company boards, say reports.

The paper was accepted for publication into the Journal of Corporate Financeearlier this month.

Full Content: UBC News

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