M&A researchers reflect on turbulent policy environment

The UK government’s proposed reforms to the Competition & Markets Authority risk diluting the regulator’s independence, a former non-executive director of the organisation said this week.

Alan Giles, who served on the CMA board until 2017, said last year’s abrupt dismissal of the regulator’s Chair, Marcus Bokkerink, and his replacement with former Amazon UK boss Doug Gurr had shocked the competition community. It also sent a very strong message to British regulators that they must drive – not hinder – growth, he said.

Delivering the keynote speech at Bayes Business School’s annual M&A research conference, Mr Giles looked back at changes in the mergers and acquisitions landscape since he spoke at the first such conference in 2016, when he was deputy chair of the M&A Research Centre’s Advisory Board.

He noted that the CMA and its counterparts in other jurisdictions face a difficult challenge in protecting consumers and scrutinising mergers in markets which are changing rapidly. Although still independent from their sponsoring governments, there is increasing evidence of political interference, he said.

Mr Giles continued: “Independent antitrust authorities in major jurisdictions such as the US, UK and Europe seem increasingly prone to politicisation in their regulatory role as their sponsoring governments grapple with the challenge of driving economic growth.”

The UK’s Department of Business and Trade is consulting on changes to the decision-making processes at the CMA, with a proposal to replace independent panels of experts with sub-committees of the CMA board. While acknowledging that the plans would improve the consistency, accountability and alignment of CMA policies and decisions, Mr Giles, warned that its independence could be diluted.

The CMA did not prohibit a single merger last year, he noted.

Continuing the retrospective theme, M&A Research Centre founder Professor Scott Moeller highlighted the enduring issues that spark academic research interest.

He said: “Looking back at the papers submitted, there’s a lot of continuity. Back in 2016 we had a paper on private deals, one on board governance, two on shareholder approvals – including activism – and one on integration and deal success. Plus ça change, plus c'est la même chose! That’s sort of what we're still talking about these days – together with AI.”

Bayes Dean Professor Andre Spicer welcomed guests to the School and presented  an award for lifetime achievement in M&A research to Professor Rene Stulz, Professor of Finance at the Fisher College of Business at Ohio State University.

Professor Spicer told Professor Stulz that he had shaped the field of M&A research “more profoundly than perhaps any scholar of this generation. Today, we honour your work that has transformed how we understand risk, governance and value creation in corporate finance.”

Professor Spicer noted that the conference took place on the day Bayes’ Finance Master’s programme was ranked third in the UK and 16^th globally in the Financial Times rankings.

He added: “We are very proud of our research and the M&A Research Centre plays a big role in that.”

Academics from around the globe presented and discussed papers on a range of M&A-related issues, including:

• Acquiring supplier networks: Domestic mergers for international supply chain resilience
• Bidder pools in mergers and acquisitions
• Monopolizing minds: How M&As stifle innovation through labor market power
• Takeovers and knowledge worker productivity
• Maturity overhang: evidence from M&A
• Fix the price or price the fix? Resolving the sequencing puzzle in corporate acquisitions
• Are bidder-initiated takeovers opportunistic?
• Shareholder activism, takeovers and managerial discipline
• Do business unit leaders matter for mergers and acquisitions?

Michel Driessen, Professor of Practice and Director of the M&A Research Centre, said: “We understand that this is the only annual academic conference exclusively focussed on the M&A sector. We’re grateful to the academics who presented and to the researchers and M&A professionals who led the discussions that flowed from those presentations.

“The conference has cemented the centre’s world-leading position in M&A research.”

Bayes Professor of Finance Professor Anh Tran, who co-chaired the conference, thanked the European Corporate Governance Institute for sponsoring the event.