Reduction of the information asymmetry in mergers & acquisitions through the means of payment

Abstract

When considering mergers & acquisitions (M&A) it is obvious that each participant has different motives and expectations. It is also noted that the participants never have enough information, since it is preferable not to put their own private information openly. For this reason, the information asymmetry occurs. When considering the M&A transactions it is determined that payment instruments may also influence the information asymmetry. The goal of this scientific paper is to compare theoretically and empirically the effectiveness of the means of payment and to identify the best financial instrument to reduce the information asymmetry. After analysing the results of the empirical researches, thorough specific criteria research, the most efficient method of payment regarding the information asymmetry by the M&As is selected. In order to conduct the best results a literature review of the most important articles and empirical researches is made, using the key words of the paper.