Valuation as a Decision-Making Tool in Mergers and Acquisitions: Institutional Constraints, Information Asymmetry, and Practical Trade-offs.

Thyago Macedo Lopes de Lima

Published: 08 February 2026

ABSTRACT

Valuation models play a central role in mergers and acquisitions M&As), yet empirical evidence and professional experience consistently show that well-structured financial analyses do not necessarily prevent value-destroying transactions. This paper examines valuation not as a purely technical exercise, but as a decision-making tool operating under institutional, informational, and organisational constraints. Drawing on observed patterns in real M&A transactions, the analysis explores how time pressure, information asymmetry, incentive misalignment, and governance structures shape how valuation outputs are interpreted and used by decision-makers. Rather than proposing a new valuation model, the paper develops an applied analytical framework that highlights critical decision points where rational financial logic often conflicts with practical realities. The findings suggest that understanding these frictions is essential for executives, advisors, and investors seeking to improve deal outcomes and mitigate systematic errors in M&A decision-making.

Citation (Harvard)

Lopes de Lima, T. 2026. Valuation as a Decision-Making Tool in Mergers and Acquisitions: Institutional Constraints, Information Asymmetry, and Practical Trade-offs. Journal of Operational Excellence in Mergers and Acquisitions, 2(1), pp. 1-18.