The Role of Financial Expert CEOs in Mergers & Acquisitions

International audienceThis paper studies how financial experience affects CEOs’ decisions on Mergers and Acquisitions (M&A). The paper finds that financial experts underperform in M&A. CEOs with financial experience are bad bargainers and create fewer synergies with targets. They engage in fewer deals and prefer public targets. The results suggest that financial expertise comes at the expense of having expertise in other dimensions. However, when CEOs have industry expertise, their financial expertise is the icing on the cake