Subject. This article examines the influence of factors on the activity of financial investors and strategic buyers in leveraged buyout transactions. Objectives. The article aims to clarify the dependence of the behavior of financial investors and strategic buyers on changes in various market conditions. Methods. For the study, I used a correlation analysis, logistic regression, comparison, and the abstract-logical and monographic methods. Results. The article identifies and describes differences in the behavior of the main types of buyers of debt financing transactions. Based on an analysis of leveraged buyout transactions in the euro area between 2002 and 2020, the article assesses the dependence of the relative contribution of financial investors and strategic buyers to the overall flow of transactions on the terms of debt and equity markets. Transaction-level analysis shows that differences in the behavior of financial investors and strategic buyers are due to differences in their propensity to make transactions in different market conditions and differences in adjustments to the volume of transactions they make, but are independent of the takeover premium they pay. Relevance. The results of the study contribute to a better understanding of the behavior of each type of buyout buyer, depending on changing market conditions.
Bettinazzi E.L.M., Zollo M. Stakeholder Orientation and Acquisition Performance. Strategic Management Journal, 2017, vol. 38, iss. 12, pp. 2465–2485. URL: Link
Ivanov A.E. [Waves of mergers and acquisitions in the global and Russian markets: Analysis of specifics, causes, and slowdowns]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2017, vol. 16, no. 3, pp. 488–501. (In Russ.) URL: Link
Opler T., Titman S. The Determinants of Leveraged Buyout Activity: Free Cash Flow vs. Financial Distress Costs. The Journal of Finance, 1993, vol. 48, iss. 5, pp. 1985–1999. URL: Link
Ayash B., Bartlett R.P. III, Poulsen A.B. The Determinants of Buyout Returns: Does Transaction Strategy Matter? Journal of Corporate Finance, 2017, vol. 46, pp. 342–360. URL: Link
Martynova M., Renneboog L. What Determines the Financing Decision in Corporate Takeovers: Cost of Capital, Agency Problems, or the Means of Payment? Journal of Corporate Finance, 2009, vol. 15, iss. 3, pp. 290–315. URL: Link
Hansen R.G.A Theory for the Choice of Exchange Medium in Mergers and Acquisitions. The Journal of Business, 1987, vol. 60, no. 1, pp. 75–95. URL: Link
Damodaran A. Investitsionnaya otsenka: Instrumenty i tekhnika otsenki lyubykh aktivov [Investment Valuation: Tools and Techniques for Determining the Value of Any Asset]. Moscow, Al'pina Pablisher Publ., 2020, 1316 p.
DePamphilis D.M. Mergers, Acquisitions, and Other Restructuring Activities. An Integrated Approach to Process, Tools, Cases, and Solutions. Academic Press, 2019, 564 p.
Gaughan P.A. Mergers, Acquisitions, and Corporate Restructurings. Hoboken, N.J.,John Wiley & Sons, Inc., 2015, 685 p.
Jensen М.C., Meckling W.H. Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics, 1976, vol. 3, iss. 4, pp. 305-360. URL: Link90026-X
Kaplan S.N., Strömberg P. Leveraged Buyouts and Private Equity. Journal of Economic Perspectives, 2009, vol. 23, no. 1, pp. 121–146. URL: Link
Konnova A.S. [Creation of the added value at leveraged buyouts]. Rossiiskoe predprinimatel'stvo = Russian Journal of Entrepreneurship, 2016, vol. 17, no. 20, pp. 2611–2624. URL: Link (In Russ.)
Petrikova E.M., Koshkareva L.A. [Specific features of assessing finance efficiency of deals on Russian M&A market]. Vestnik Rossiiskogo ekonomicheskogo universiteta im. G.V. Plekhanova = Vestnik of Plekhanov Russian University of Economics, 2019, no. 4, pp. 40–53. URL: Link (In Russ.)
Haddad V., Loualiche E., Plosser M. Buyout Activity: The Impact of Aggregate Discount Rates. The Journal of Finance, 2017, vol. 72, iss. 1, pp. 371–414. URL: Link
Harford J., Stanfield J., Zhang F. How Does an LBO Impact the Target's Industry? 2016. Available at SSRN: Link
Martos-Vila M., Rhodes-Kropf M., Harford J. Financial versus Strategic Buyers. Journal of Financial and Quantitative Analysis, 2019, vol. 54, iss. 6, pp. 2635–2661. URL: Link
Harford J. What Drives Merger Waves? Journal of Financial Economics, 2005, vol. 77, iss. 3, pp. 529–560. URL: Link
Malenko A., Malenko N. A Theory of LBO Activity Based on Repeated Debt-Equity Conflicts. Journal of Financial Economics, 2015, vol. 117, iss. 3, pp. 607–627. URL: Link
