Equity vs. cash in corporate aquisition payment structures: An analysis of determinants of firm-, deal-, and country-specific factors that influence the method of payment in corporate acquisitions in Denmark and the Netherlands

Corniels Tavenier

Student thesis: Master thesis


This research looks at the firm-, deal-, and country specific variables that have an influence on how the financing of a corporate acquisition is structured. The study looks at acquisitions between 2003 and 2008, carried out by listed companies from Denmark and the Netherlands. By the inclusion of Denmark a new country perspective is added to this field of research, as this country has never received any attention before with respect to the method of payment for a corporate acquisition. Another new facet in this study is the inclusion of a new variable: the liquidity of a firm’s equity. There exists significant evidence that Danish firms with illiquid equity prefer to pay for acquisitions with cash rather than equity. Contrary to previous research, there is evidence for Denmark that firms with a large shareholder prefer to pay for acquisitions with equity instead of cash. Consistent with other research it is found that for both Denmark and the Netherlands many other deal- and company-specific variables have an influence on the method of payment for a corporate acquisition.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
Publication date2009
Number of pages136