Retail Customer Reactions to Private Equity Acquisitions *
Type
working paper
Date Issued
2023-05-22
Author(s)
Abstract
Acquisition announcements by private equity funds are associated with significant reductions in customer visits to target firm outlets, measured using aggregated mobile phone data. These reductions occur in primary but not in secondary buyouts. Customer reviews do not become more negative. Following deal completion, the customer losses are reversed. Thus, the initial decrease is unlikely to be the consequence of operational changes. The decrease in visits is smaller in areas with higher economic connectedness, income, stock market participation, and self-employment rates, and larger in altruistic, Republican-voting and individualistic regions. The decrease is also larger for outlets facing more competition.
Language
English
Keywords
JEL classification: D12
G14
G24
G34 private equity
buyout
customer reaction
reputation
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Name
Retail customer reactions to PE acquisitions v36.pdf
Size
679.81 KB
Format
Adobe PDF
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