Does Board Gender Diversity at Target Firms Influence Acquisition Outcomes? Us Evidence

Abstract

ABSTRACT Using US public‐to‐public mergers and acquisitions from 1999 to 2022, we examine how board gender diversity at target firms influences acquisition outcomes. Firms with gender‐diverse boards are less likely to receive acquisition bids; when they do, they command higher premiums and take longer to complete the acquisition. Target shareholders gain in both percentage and dollar terms while acquirer shareholders lose, consistent with a bargaining‐driven transfer of merger gains. The combined target–acquirer return is statistically indistinguishable from zero; therefore, we do not interpret the results as evidence of value creation or destruction. The premium effect is concentrated among boards with three or more female directors. It operates specifically through female directors with substantive committee assignments, multiple outside board seats, and central network positions. Parallel interactions using male‐director quality measures yield no comparable effect. The premium effect is amplified by target‐side advisory and legal counsel engagement, with no comparable effect on the acquirer side or at the deal level. The bid‐premium effect remains robust to propensity score matching and entropy balancing on predetermined firm characteristics. Our results reframe the joint pattern of positive target and negative acquirer returns from a value‐destruction interpretation to bargaining‐driven redistribution.