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The value of financial advisors in M&A negotiations

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  • Maître, Arnaud
  • Weigert, Florian

Abstract

This paper investigates whether effort of financial advisors in M&A transactions has an impact on deal prices. Based on information from SEC “Background of the Merger” sections between 1994 and 2022, we proxy advisors’ effort by the number of meetings in which they were involved during the negotiation process. Our results reveal an important role of effort in the deal price setting process: A one standard deviation involvement increase of the target (acquirer)’s advisors enhances (lowers) deal premiums by 2.21% (–2.51%). Our findings cannot be explained by superior deal picking ability and are in line with the notion that advisors create “excess-of-fees” value for clients in M&A deals.

Suggested Citation

  • Maître, Arnaud & Weigert, Florian, 2026. "The value of financial advisors in M&A negotiations," Finance Research Letters, Elsevier, vol. 106(C).
    • Handle: RePEc:eee:finlet:v:106:y:2026:i:c:s1544612326007968
    DOI: 10.1016/j.frl.2026.110268
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    Keywords

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    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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