EIRC Seminar – Daniela Schoch on “Merger Rhetoric and the Credibility of Managerial Synergy Forecasts”


Date: Tuesday, May 2nd, 2023

Time: 12:00 to 13:30

Paper by: Daniela Stephanie Schoch (emlyon), Pooyan Khashabi (ESSEC), and Desiree-Jessica Pely (LMU)

Discussant: Tao Han (emlyon)


Daniela Schoch presented her working paper titled “Merger Rhetoric and the Credibility of Managerial Synergy Forecasts” in our research seminar on May 2nd, 2023.

All participants engaged a lot with her work and provided very constructive feedback.

Thanks to everyone, especially to Daniela for sharing her work and to Tao for doing a great job as discussant.


Merger Rhetoric and the Credibility of Managerial Synergy Forecasts

By Daniela Stephanie Schoch, Pooyan Khashabi, and Desiree-Jessica Pely



Managers frequently project high synergistic gains when announcing M&As. This paper analyzes when promised synergies are value-relevant. Using text analytical methods, we find a positive relationship between synergy projections and announcement returns only when promised numerical projections are credible, e.g., when accompanied by thorough verbal explanations and low impression management. Furthermore, credibility increases when concrete instead of embellishing language is used. Hence, the more precise the information that firms disclose is, the more trust they foster in the underlying logic of the deal. Generally, investors seem to see through vacuous statements and value substance over form and verboseness of M&A announcements.