Mergers work great when an open company buys a secretive one—but if the secretive guys are in charge, the whole thing usually blows up.
March 20, 2026
Original Paper
M&A mismatches in information asymmetry and merger and acquisition performance
SSRN · 6379418
The Takeaway
While we usually assume transparency is a universal good, this study suggests the value in M&A comes from 'mismatches.' Transparent buyers are uniquely capable of 'unlocking' and managing the hidden data of opaque companies, whereas secretive buyers tend to perform poorly regardless of who they buy because they lack the transparency to leverage new assets.
From the abstract
We examine the impact of ex-ante target and acquirer information asymmetry (IA) measures on the performance of the combined post-merger firm. We propose a novel IA mismatch hypothesis that M&A deal and external parties can utilize which applies to simultaneous mismatches between the target and acquirer IA measured before the merger offer. This hypothesis examines how mismatches reflect the characteristics of the deal parties, and its influence on short-and long-run performance. We show that