The Effects of Uncertainty on European Mergers and Acquisitions: A Study of the Relationship Between Firm Acquisitiveness and Uncertainty in Europe

Sammanfattning: The purpose of this paper is to investigate the relationship between uncertainty and mergers and acquisitions (M&A) in Europe. We use price and company data for firms in the 10 largest economies in Europe for the period 1990-2018. Through our tests, we find that increased uncertainty has a negative effect on firm acquisitiveness. We also find that firms undertaking M&A transactions during periods of higher uncertainty spend a longer time completing the deals. We find no evidence that European firms use more stock as payment during periods of higher uncertainty, suggesting that there are other factors that are more important to firms when choosing the form of payment for M&A transactions.