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M&As are significant corporate events that lead to changes in ownership structure and management. These events result in a "change" in conflict of interest (agency cost) among owners. In the context of M&A, agency cost could be affected by many factors. The aim of this research is to review the existing literature on factors affecting agency costs in the context of M&A. The impact of agency cost is elucidated in M&A context by examining its impact on M&A performance. A conceptual framework is developed based on review and synthesis of evidence from 38 research papers. Three factors were identified that affect agency costs in the M&A context and they are firms' financials, corporate structure, and deal characteristics. Additionally, agency cost is classified according to nature of conflict among stakeholders such as shareholder-manager conflict (AC-1), shareholder-director conflict (AC-1.1), shareholder-shareholder conflict (AC-2) and shareholder-creditor conflict (AC-3). This classification of agency cost furthers our understanding of the impact of different factors. The synthesis of evidence identifies research gaps that can extend future research avenues and improve comprehension of the effects of agency costs in M&A context. This study's findings have significance for analysts focusing on post-M&A returns and policymakers seeking to devise and implement policies reducing post-M&A agency costs. This systematic review contributes to the current reservoir of knowledge in the field of M&A research by identifying the factors influencing agency costs and their influence on post-M&A performance. The provided insights may facilitate the development of strategies for managing agency costs in M&A transactions. [ABSTRACT FROM AUTHOR]

Acquisitions constitute substantial corporate investments, often leading to changes in ownership and top management giving rise to possible conflicts of interest. The impacts of such conflicts following an acquisition are absorbed by the acquirer and are referred to as agency costs. This study focuses on exploring the influence of the target companies on changes in the post-acquisition agency costs of acquiring companies. A panel fixed effects model is used to analyze acquisitions that took place between 2008–09 and 2019–20. The study's findings indicate that post-acquisition changes in the agency costs of acquirers significantly vary based on the presence of domestic and foreign promoters in the target company. Further promoter groups such as domestic promoters and foreign promoters contribute to conflicting interests, exacerbating post-acquisition agency costs. The monitoring role assumed by foreign promoters of target companies plays a pivotal part in reducing the post-acquisition agency costs of acquirers. Foreign promoters also positively influence post-acquisition profitability by adversely affecting operating expenses, suggesting that they mitigate agency costs by exerting control over management through the monitoring of debt, cash, and profitability. The post-acquisition utilization of the target's cash reserves positively correlates with the operating expenses of the acquirer. It is observed that the acquisition of larger targets magnifies agency costs. [ABSTRACT FROM AUTHOR]