Acquisitions are complex transactions which often require long-term relationships between firms and their advisors. Such relationships hold a very high potential for agency concerns, which have remained a persistent challenge in both research and practice. We leverage exchange and agency theories to examine the benefits associated with the status of a serial acquirer’s exchange relationships with regards to balancing the benefits of advisory relationships while minimizing agency concerns and costs. We initially study a 20-year sample of serial takeover sequences using firm-level propensity scored matching and find that acquirers demonstrating a willingness to switch experience more favorable reactions from shareholders, pay lower acquisition premiums and fees, and complete deals more quickly. Further subsequent analysis on an expanded 30-year sample indicates that when acquirers have more bargaining power over their advisors, switching advisors can help acquirers get a better deal by paying a lower premium without having to pay higher fees, however shareholders may frequently fail to recognize such benefits. Collectively, these observations offer some interesting implications for future M&A research and practice.
