Three-way Takeovers

Fangming Xu, Huainan Zhao

Research output: Contribution to journalArticle (Academic Journal)peer-review

1 Citation (Scopus)


In a three-way takeover, a firm bids for a bidder while the bidder’s own acquisition deal is ongoing. The bid creates a three-party fight between the target, bidder, and bidder’s bidder (b-bidder) which is unobservable in typical takeover contests. Examining a sample of three-way takeovers, we find that over half of the deals are clustered in financial, utilities, and communication, where fierce competition for market power drives the three-way bids. Targets and bidders gain from the three-party bargaining at the expense of b-bidders who appear to be more concerned about winning the bids irrespective of the costs.
Original languageEnglish
Pages (from-to)67-90
Number of pages14
JournalJournal of Financial Research
Issue number1
Publication statusPublished - 19 Mar 2013

Structured keywords

  • AF Corporate Finance


  • Mergers
  • Acquisitions
  • Three-way Takeovers


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