Determinants of Hostile Versus Friendly Mergers and Acquisitions in the Global Insurance Sector: Evidence from the Post-Crisis Period
Wissam El Khoury, Sebouh AintablianThis study examines the relatively underexplored phenomenon of hostile takeovers within the insurance industry, a sector that played a significant role in the events surrounding the 2008 global financial crisis. Using a sample of 754 insurance merger and acquisition (M&A) transactions completed between 2008 and 2021, we investigate the determinants of hostile takeover activity. The dataset comprises acquiring and target firms from 46 countries and special administrative regions (SARs), providing a broad international perspective on post-crisis insurance-sector M&A dynamics. The findings reveal that several transaction- and firm-specific factors significantly affect the likelihood of hostile takeovers. In particular, a target firm’s prior M&A experience, increases in target book value, higher bidder research and development expenditures, bid revisions, and acquisition premia are positively associated with takeover hostility. While descriptive analyses document notable variation across jurisdictions, the primary empirical evidence is derived from pooled regression models incorporating country fixed effects. The results contribute to the literature on insurance-sector consolidation by identifying industry-specific factors associated with hostile acquisition activity and enhancing understanding of how information asymmetries, strategic considerations, and governance mechanisms shape takeover outcomes. These findings offer valuable implications for corporate managers, investors, and policymakers operating within a globally interconnected and highly regulated insurance industry.