Why CEOs Surround M&A Announcements with Unrelated Good News

Executive Summary

In “Why CEOs Surround M&A Announcements with Unrelated Good News,” the authors examine a subtle but important communication tactic used around acquisition announcements: impression offsetting. This occurs when a company releases unrelated positive news near the time of a major strategic announcement, such as an acquisition, to reduce negative investor reaction or distract attention from concerns about the deal.

The Harvard Business Review article is especially relevant for CEOs, boards, investors and communications leaders because M&A announcements often trigger market skepticism. Investors may question whether the deal price is too high, whether the strategic logic is sound, or whether management is pursuing growth for reasons that do not fully align with shareholder value.

The authors’ research suggests that this communication pattern may reveal something deeper: CEOs who surround acquisition announcements with unrelated positive press releases may be less confident in the deal’s value creation potential. In their study, CEOs whose firms issued more unrelated positive press releases around acquisitions exercised 6.7% more stock options in the following quarter, averaging about $220,000 more than CEOs whose firms did not use the tactic.

For business leaders, the central takeaway is clear: the timing of communication can be as revealing as its content.

Major Takeaways

Impression offsetting can be a warning signal.
Positive news released around an M&A announcement may not be accidental. It may be a deliberate attempt to soften investor concerns or shift attention away from the transaction’s risks.

CEO confidence can show up indirectly.
The study links more unrelated positive press releases around acquisition announcements with higher CEO option exercises in the following quarter. The authors interpret this as a possible signal that the CEO may be less confident in the acquisition’s future value.

Market communications are strategic, not neutral.
The article reinforces that corporate communications should be evaluated not only by what is said but also by when it is said. Timing, sequencing and surrounding announcements can shape stakeholder interpretation.

Risk perception matters.
The research found stronger patterns in cases involving older CEOs and CEOs in fast-moving industries. For example, CEOs in dynamic industries who used impression offsetting exercised 61.3% more options, representing a dollar difference of about $1.7 million, compared with CEOs in more stable industries.

Boards should pay attention to communication behavior.
The article has implications for governance and executive compensation. Boards may need to examine whether CEO incentives, stock option structures, and communication strategies are creating signals of misalignment between management confidence and shareholder interests.

Talking Points for Executives

M&A communication should build trust, not merely manage market reaction.

When a company announces unrelated good news around a major deal, investors may reasonably ask whether leadership is trying to change the narrative.

Boards should review not only deal economics and strategic fit, but also the communications plan surrounding the announcement.

The sequencing of press releases can influence how markets perceive management’s confidence.

Strong leaders should be prepared to defend the strategic logic of a deal directly rather than relying on positive distraction.

Reflection Questions

Are we using communications to clarify our strategy, or to distract from weaknesses in it?

Would investors see our M&A announcement as transparent and confidence-building?

What unrelated announcements are being scheduled near major strategic news, and why?

Do our executive compensation structures unintentionally encourage short-term wealth protection after risky strategic decisions?

How would our board interpret the timing of our external communications around a major acquisition?

Potential Action Items

Review recent M&A communications and identify whether unrelated positive news was released near major transaction announcements.

Create a board-level checklist for evaluating communications timing around acquisitions, divestitures and other strategic moves.

Require investor relations and corporate communications teams to document the rationale for major press release sequencing.

Stress-test the M&A narrative before announcement: strategic logic, valuation, integration plan, synergies, risks and shareholder value case.

Review executive option exercise policies following major strategic announcements to reduce perceived conflicts of interest.

Train leadership teams to communicate deal uncertainty honestly rather than relying on overly polished announcement packages.

Recommended Similar Articles

“The CEO’s Role in M&A” — McKinsey & Company
A useful companion article on the specific actions only CEOs can take before, during and after M&A transactions, including strategy, stakeholder management, deal size and culture.

“Why CEOs Surround M&A Announcements with Unrelated Good News” — Harvard Business School Publishing
The Harvard Business School Publishing version provides a concise overview of the article, including publication details, length, discipline and key themes such as corporate communications, financial markets, uncertainty and M&A.

Academy of Management Journal research behind the article
The HBR article is based on forthcoming research in the Academy of Management Journal examining acquisition announcements, CEO confidence, press release timing and option exercise behavior.

“M&A: The One Thing You Need to Get Right” — Harvard Business Review / Roger Martin
A related strategy-focused HBR article for leaders who want to think more deeply about value creation and the strategic logic behind acquisitions.