Date of Completion

Spring 5-2-2014

Thesis Advisor(s)

David Souder; Michel Rakotomavo

Honors Major

Finance

Disciplines

Business Administration, Management, and Operations | Corporate Finance | Finance and Financial Management

Abstract

The rationale behind a merger or acquisition is to improve the financial performance of the acquiring firm. Many factors go into the the valuation of a company and consequently the premium paid.

This paper will examine what impact upper management, specifically the CEO, has on the valuation of a company during mergers and acquisitions. This impact, called the CEO effect, will be central to the paper. Different valuation methods of this effect, as well as firm valuations, will be analyzed and considered. Specifically, how the CEO effect affects the premium paid by the acquiring firm will be the main focus. By studying both successful and failed mergers and acquisitions, as well as recent mergers, the role of the CEO in firm valuation will become clearer.

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