【文章摘要】We adopt a principal–principal perspective to examine whether comment letters for mergers and acquisitions (M&A) protect shareholders, particularly minority shareholders, of acquiring firms in China, where investor protection is weak. This public enforcement tool has several features: (i) regulators provide detailed comments on various matters, (ii) various stakeholders are called upon to respond, and (iii) failure to adequately address the comments to the satisfaction of regulators results in M&A applications being rejected. Our main results show that M&A comment letters affect the outcome of M&A transactions by reducing acquisition premium and improving the fulfillment of performance commitment. Furthermore, this effect is more pronounced when the principal–principal conflict is more severe, as indicated by a greater divergence between cash flow rights and control rights, along with weaker monitoring by multiple large shareholders. Our results suggest that M&A comment letters, if used appropriately, effectively enhance investor protection in less developed economies. We contribute to the literature by providing new evidence of the effects of M&A comment letters in settings with weak investor protection.

【关键词】Public enforcement; Countries with weak investor protection; China; Comment letter; Mergers and acquisitionse

【文章作者】Kefu Lyu, Huiying Wu, Sammy Xiaoyan Ying, Jiaxing You 

【作者单位】中国农业大学经济管理学院、西悉尼大学School of Business、纽卡索大学Newcastle Business School、厦门大学管理学院

【发表期刊】Journal of Accounting and Public Policy 46 (2024) 107227

【基金资助】Major Program of National Social Science of China (23&ZD072)

【全文下载】Use of comment letters for mergers and acquisitions in a setting with weak investor protection.pdf