We examine corporate lobbying activity and mergers & acquisitions. If eective, rm lob- bying expenditures could in uence legislation and facilitate favorable regulatory treatment, which would be positively re ected in market reactions to merger announcements. However, average announcement returns for lobbying rms are lower than for non-lobbying rms. In addition, lobbying rms tend to have powerful CEOs that receive more cash compensation after a merger. CEO turnover is unaected by lobbying activity. These results suggest that corporate lobbying may be indicative of CEO entrenchment rather than a rm's attempt to maximize shareholder wealth.