Earn-outs to bridge gap between negotiation parties – curse or blessing?

• Autorzy: Toll Ch. , Rolinck J.-P.

Identyfikatory

DOI

10.7494/manage.2017.18.1.103

• Języki publikacji: EN

Abstrakty

EN

An agreement upon the terms of company transactions is aggravated by the existence of differ-ent information levels concerning the negotiation parties; this can be seen as a basic cause for divergent price expectations. Hence, the question is how the existing differences in price expectations of the transaction parties can be handled to reach a consensus, even when there is no area of agreement in the initial round of negotiations. Earn-outs are an interesting approach in overcoming divergent price expectations by making the purchase price dependent on the future performance of the company. However, formulating and implementing earn-outs may have a substantial potential for conflict. The present contribution shows which advantages and disadvantages the transaction parties face if an agreement regarding earn-outs is made.

Słowa kluczowe

EN

mergers and acquisitions; asymmetric information problem; earn-out

• Wydawca: Wydawnictwa AGH
• Czasopismo: Managerial Economics
• Rocznik: 2017
• Tom: Vol. 18, no. 1
• Strony: 103--116
• Opis fizyczny: Bibliogr. 48 poz.

Twórcy

autor

Toll Ch.

• Fern-Universität in Hagen, Chair of Business Administration, esp. Investment Theory and Business Valuation

autor

Rolinck J.-P.

• Fern-Universität in Hagen, Chair of Business Administration, esp. Investment Theory and Business Valuation

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