Download or read book Impact of Merger and Acquisition on the Average Stock Return written by and published by . This book was released on 2006 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Impact of Merger and Acquisition Activities on Corporate Performance Measured on an Accounting and Market Base written by Malwina Woznik and published by GRIN Verlag. This book was released on 2013-08-07 with total page 115 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2013 in the subject Business economics - Controlling, grade: 1,3, University of Cologne (Seminar für allgemeine BWL und Controlling), language: English, abstract: “Warren Buffett swallows Heinz: Sauce for the sage” – a typical takeover announcement was published lately on 14th February 2013. Warren Buffett, a well known inves tor, acquired along with the financial investor 3G Capital the H. J. Heinz Company for $ 28 billion. This is likely to become the largest transaction in the food industry. The company's stock price rose more than 20.0 percent after the publication which is a very characteristic reaction to deal announcements. Hence, the important question is, if transactions, such as the takeover of the H. J. Heinz Company, affect the corporate performance consistently. In general, the core idea about mergers and acquisitions (M&A) is to generate additional future growth if for example organic growth is limited. If two companies merge or a target is bought by another company (the acquirer), shareholders believe in synergy effects. These are revenue enhancements, cost reductions, tax gains and reduced capital requirements leading to business growth and thus to a higher value of the new company. However, it is questionable if this theory can also be experienced in the real world. Ever since the effects of M&A have been analysed, the market of the United States (US) was used as data source. This is plausible due to the fact that the very first information was well recorded for US companies. It is remarkable that literature contributes very little research on Europe, although the number of announced European transactions is comparable to those of the US. For example, in 2007 the European deals volume overtook the one from the United States of America (USA) for the first time. Moreover, research on single European countries almost never exists or only rarely. One exception is the United Kingdom (UK) with an early takeover history beginning in the 1960s. However, European countries should be analysed separately because of its high diversity regarding the accounting framework, the corporate governance or the legal and regulation structure. For instance, Germany is characterised by conservative accounting principles and a high regulation by the banking sector. These issues may also influence the M&A decision making process.
Download or read book Impact of Merger and Acquisitions on Stock Returns written by Dr. Amir Rafique and published by . This book was released on 2013 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: Mergers and acquisition are not only related to accounting measures of performance of firms but it also affects the wealth of shareholders either positively or negatively. According to Hubris hypothesis, the merger and acquisition announcement brings negative effect to shareholders wealth and decreases the abnormal return in post period. The present study took this analysis separate for long and short run period. To capture immediate effect on shareholders return study used Market Model to calculate abnormal returns and employed the t-test on it to check the significant differences in two sample data set. Out of 12 cases of M&A eight mergers showed negative abnormal returns for post period with statistical significance at 1% level, two at 5% and two acquiring firms reduced returns were not statistically significant. Overall on the basis of most of M&A results, the study concluded consistent results with earlier studies. The long run analysis employed by using Ohlson (1995) model for firm value with introducing dummy variable for the pre and post period. The results indicated coefficient of dummy for merger was -0.52 with statistical significance at 1% level which is demonstrating negative effect on share price which ultimately reduces the returns. The study concluded that merger and acquisition announcement bring negative effect on shareholders return either for short run or long time period.
Download or read book Mergers and Acquisitions Inplications for policy written by Simon Peck and published by Taylor & Francis. This book was released on 2002 with total page 520 pages. Available in PDF, EPUB and Kindle. Book excerpt: This set includes articles from the four main fields which have influenced the study of Mergers and Acquisitions: Economics, Finance, Strategic Management and Human Resource Management. Featuring the key papers by individuals who shaped the field, the collection presents these formative pieces in thematically grouped sections, including coverage of: * Perspectives on the modern business corporation and the role of mergers and acquisitions: historical, financial, strategic and management * Causes of mergers and acquisitions activity * Performance impact of mergers and acquisitions activity * Public policy and the corporation The set features a comprehensive index and original introductory material.
Download or read book Impact of Mergers and Acquisitions on the Performance of the Indian Bank s Share Price written by Yaduveer Yadav and published by . This book was released on 2019 with total page 12 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper presents an investigation into the relationship between the announcement of mergers and acquisition and the existence of positive abnormal returns for shares of these firms. The aim of this project is to examine the impact of Merger and Acquisition on the stock prices of Indian Banks by using the Event Study Methodology; it is one of the most frequently used tools in financial research. The objective of Event Study is to assess whether there are any abnormal or excess returns earned by security holders accompanying specific events (e.g. merger announcements, earnings announcements, stock splits), where an abnormal return is the difference between observed return and appropriate return by stock market during a particularly defined event window.In order to analyse the effect of announcement of bank's Merger and Acquisition on stock price, we have considered four cases of Mergers in banking sector. In this study, we tested our results by analysing the daily return of the event windows and compare with average pe-riod return of security. By accepting the abnormal return as a benefit of the acquisition and investors of Acquirer Company received profit in term of share value appraisal. We observed that acquirer got benefit by the acquisition deals and it reflect through the excess return over the normal return of bank's share prices. In last 10 to 15 years banking industry passed through different scenario and to compete in this scenario some banks acquired other banks to improve their own market cap and financial conditions with expanding market by acquisition. The purpose of this study is to figure out the effect of the acquisition on the share capitalization value of the Acquirer Company and abnormal return due to the acquisition. This paper is based upon the secondary data analysis of the acquirer company share prices movements in respect of the market index price movements.
Download or read book Mergers and Acquisitions written by Neelam Rani and published by Springer. This book was released on 2016-09-15 with total page 277 pages. Available in PDF, EPUB and Kindle. Book excerpt: The book examines the market reaction to mergers and acquisitions (M&A) announcements over a period from 2003 to 2015. Mergers and acquisitions continue to be amongst the preferred competitive options available to the companies seeking to grow fast in the rapidly changing global business scenario. M&A as a growth strategy has received attention from developed as well as emerging economies. It has been extensively used by managers as an expansion strategy and also serves as an important instrument for increasing corporate efficiency. Recently, M&A has grown at a rapid pace, creating a need for research to analyze what drives this phenomenon and how it affects firms and markets. As such, this book evaluates the impact of M&A on short-term abnormal returns as well long-term financial performance. It also assesses the management view concerning the motives for undertaking M&A. In addition, the book investigates the corporate governance practices of the acquiring firms and their impact on the short- term as well as long- term performance of those firms.
Download or read book The Effect of Merger and Acquisition Announcement on Stock Return in U S Communications Industry written by Ningsih Wijaya Dharma-Wijaya and published by . This book was released on 1999 with total page 160 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Mergers written by Patrick A. Gaughan and published by John Wiley & Sons. This book was released on 2005-05-20 with total page 370 pages. Available in PDF, EPUB and Kindle. Book excerpt: A powerful guide for seeking out the best acquisition and merger targets As increasingly more companies look to mergers and acquisitions (M&As) as a source of new growth and revenue, there is an even greater chance that these M&As will go bad. This insightful guide focuses on one of the most often debated and key issues in mergers and acquisitions-why some deals fail miserably and why others prosper. It provides a complete road map for what potential buyers should look for when picking a target and what characteristics of sellers they should steer clear of, as well as pitfalls to avoid during the M&A process. Real-world examples are provided of high-profile failures-Quaker Oats, United Airlines, Sears, and Mattel-and high-profile successes-General Electric and Cisco. Patrick A. Gaughan (New York, NY) is President of Economatrix Research Associates and a professor of Economics and Finance at the College of Business, Fairleigh Dickinson University. He is actively engaged in the practice of business valuations for mergers and acquisitions, as well as other related applications.
Download or read book The Impact of Mergers and Acquisitions on World Energy Enterprises Stock Returns written by Aristeidis Samitas and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines energy firms' stock returns' behaviour, when they announce mergers and acquisitions. The methodology used is event study analysis. The particular companies that were selected are companies from all over the world and are divided into four regions. Companies' selected taking into consideration the market where they are listed, if they are bidders or targets, if they are domestic or not, the value of the transaction and the year of announcement. Findings show that mergers and acquisitions add financial value on energy firms' shares.
Download or read book Bank Mergers Acquisitions written by Yakov Amihud and published by Springer Science & Business Media. This book was released on 1998-02-28 with total page 268 pages. Available in PDF, EPUB and Kindle. Book excerpt: As the financial services industry becomes increasingly international, the more narrowly defined and historically protected national financial markets become less significant. Consequently, financial institutions must achieve a critical size in order to compete. Bank Mergers & Acquisitions analyses the major issues associated with the large wave of bank mergers and acquisitions in the 1990's. While the effects of these changes have been most pronounced in the commercial banking industry, they also have a profound impact on other financial institutions: insurance firms, investment banks, and institutional investors. Bank Mergers & Acquisitions is divided into three major sections: A general and theoretical background to the topic of bank mergers and acquisitions; the effect of bank mergers on efficiency and shareholders' wealth; and regulatory and legal issues associated with mergers of financial institutions. It brings together contributions from leading scholars and high-level practitioners in economics, finance and law.
Download or read book The Synergy Trap written by Mark L. Sirower and published by Simon and Schuster. This book was released on 2010-05-11 with total page 321 pages. Available in PDF, EPUB and Kindle. Book excerpt: With acquisition activity running into the trillions of dollars, it continues to be a favorite for corporate growth strategy, but creating shareholder value remains the most elusive outcome of these corporate strategies—after decades of research and billions of dollars paid in advisory fees, why do these major decisions continue to destroy value? Building on his groundbreaking research first cited in Business Week, Mark L. Sirower explains how companies often pay too much—and predictably never realize the promises of increased performance and competitiveness—in their quest to acquire other companies. Armed with extensive evidence, Sirower destroys the popular notion that the acquisition premium represents potential value. He provides the first formal and functional definition for synergy -- the specific increases in performance beyond those already expected for companies to achieve independently. Sirower's refreshing nuts-and-bolts analysis of the fundamentals behind acquisition performance cuts sharply through the existing folklore surrounding failed acquisitions, such as lack of "strategic fit" or corporate culture problems, and gives managers the tools to avoid predictable losses in acquisition decisions. Using several detailed examples of recent major acquisitions and through his masterful integration and extension of techniques from finance and business strategy, Sirower reveals: -The unique business gamble that acquisitions represent -The managerial challenges already embedded in current stock prices -The competitive conditions that must be met and the organizational cornerstones that must be in place for any possibility of synergy -The precise Required Performance Improvements (RPIs) implicitly embedded in acquisition premiums and the reasons why these RPIs normally dwarf realistic performance gains -The seductiveness and danger of sophisticated valuation models so often used by advisers The Synergy Trap is the first exposé of its kind to prove that the tendency of managers to succumb to the "up the ante" philosophy in acquisitions often leads to disastrous ends for their shareholders. Sirower shows that companies must meticulously plan—and account for huge uncertainties—before deciding to enter the acquisition game. To date, Sirower's work is the most comprehensive and rigorous, yet practical, analysis of the drivers of acquisition performance. This definitive book will become required reading for managers, corporate directors, consultants, investors, bankers, and academics involved in the mergers and acquisitions arena.
Download or read book Mergers Acquisitions and Other Restructuring Activities written by Donald DePamphilis and published by Academic Press. This book was released on 2019-09-04 with total page 584 pages. Available in PDF, EPUB and Kindle. Book excerpt: Mergers, Acquisitions, and Other Restructuring Activities: An Integrated Approach to Process, Tools, Cases, and Solutions, Tenth Edition, is the most comprehensive and cutting-edge text available on the subject. Supported by recent peer-reviewed academic research, this book provides many recent, notable deals, precedent-setting judicial decisions, government policies and regulations, and trends affecting M&As, as well as takeover strategies and tactics. Today's policies, politics and economics are reflected in the book's 40 case studies, 90% of which involve deals either announced or completed during the last several years. These cases represent friendly, hostile, highly leveraged, and cross-border transactions in ten different industries, involving public and private firms and those experiencing financial distress. Sections discuss an overview of M&As, key regulations, common strategies and tactics, how managers may choose a business strategy from available options, valuation methods and basic financial modeling techniques, the negotiating process, how deal structuring and financing are inextricably linked, how consensus is reached during the bargaining process, the role of financial models in closing the deal and strategic growth options as alternatives to domestic M&As. Provides a rigorous discussion of the strengths and limitations of financial modeling as applied to M&A and how these models can be applied in various areas Includes new academic research and updated/revised case studies Presents updated M&A tactics and strategies, along with court cases and new regulations governing business combinations, valuation methodologies and financing
Download or read book Mergers Acquisitions written by Mohammed Ibrahimi and published by John Wiley & Sons. This book was released on 2018-08-14 with total page 260 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book deals with corporate mergers and acquisitions by analyzing the financial and strategic aspects. It starts with a chronological justification of the evolution of external growth operations and ends with case studies in order to put into practice the theoretical contribution of the previous titles. Through this book, we wish to detail the types of mergers and acquisitions, their modes, their motivations, their consequences and their performances. First of all, we propose a panoply of scientific research, methodological explanations and logical structuring to expose a subject of experience considered for a long time as a phenomenon in finance. Then, through a sample of 90 mergers or acquisitions, we analyze the effects of these transactions on French companies.
Download or read book AN APPRAISAL OF MERGERS AND ACQUISITIONS written by Amit Sharma and published by Independent Author. This book was released on 2023-05-29 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Questions have generally raised as to why the corporate entities go for mergers and acquisitions (M&As) as this may affect the shareholders of involved companies in different ways and this also influenced by various factors including the prevailing economic environment, size of the companies and more specifically the management of the merger process. This book is based on a study that analyses the impact of M&As on bidders' shareholder wealth and market risk through empirical evidence based on event study methods and cross-sectional regressions. The present study endeavors to analyses the impact of mergers and acquisitions (M&As) on the shareholders' value creation both in short as well as during long-term. The short-term impact has investigated by examining the abnormal returns accruing to the shareholders of acquiring, target and the hypothetical combined entity in event period around the day of announcement of M&As using the market-adjusted model of the popular event study methodology. This study uses a sample of 55 Cases of TATA group of companies involved in M&As during the period January 1, 2000, to December 31, 2015. Analysis has been categorized into three different stages. Under the first stage analysis, all 55 cases have been analyzed one by one, using Market Model and Market Adjusted Model. Abnormal Return and Cumulative Abnormal return have been calculated under both the model. In second stage analysis researcher prepared result of Pre-Event (-10 day to -1 day), Event (0 days), and Post-Event (+1 to +10 day) analysis also provide an average return of pre or postevent. Second stage analysis concluded that overall, the top company i.e. Tata Sons firm faces loss in dealing with mergers and acquisitions. As the event study is classified in Pre-Event days, Event day, and Post-Event days. The conclusion of the were based on Market Model and Market Adjusted Model. After evaluating all 55 cases of mergers and acquisitions researcher find 31 negative and 24 positive cumulative abnormal returns around the pre-event day (t-10 to t-2) under Market Model, 30 negative and 25 positive cumulative abnormal return around the pre-event day (t-10 to t-2) under Market Adjusted Model. In third stage analysis Cumulative Average Abnormal Return across the various event windows have been calculated and check the t-test and P-Value to understand the outcomes. Cumulative Average Abnormal Return values across the various pre-announcement event window (-1, 0), (-5, 0) and (-10, 0) were positive but not significant. The CAAR during the event window (0, 0) were also positive but not significant. The CAAR Value during the post-event window of (0, +1), (0, +5) and (0, +10) there was a constant fall in the CAAR values. The analysis presents the results of t-test conducted to measure the CAAR of acquisitions on different event window Share prices of the Tata firm. On the day of the event is a reaction of the random surprise because of the Mergers and Acquisition announcement as well as the other firm-specific reaction affecting the share price of the firm. Estimation of abnormal returns of Tata firm's has greater variance around the event period than in the contiguous period. These results indicated that returns to bidder firms' shareholders is not appropriate at different event window hence we can say that the market, in general, reacts positive to Mergers and Acquisitions announcements. Later, a strong correction in the market price of the bidder firm's take place as almost all the CAAR values during the post announcements periods are negative. So, a conclusion that can be drawn from the above analysis for the Principal Holding Company also, for Mergers, Managerial Hubris theory seems to hold.
Download or read book The Effect of Mergers and Acquisitions on Long run Financial Performance of Acquiring Companies written by Dieter Bernhardt Halfar and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Mergers and acquisitions continue to enjoy importance as strategies for achieving growth, although their success in creating shareholder value remains contested. The aim of this research was to evaluate whether, in the long-run, acquiring companies created or destroyed value by evaluating the differences between pre- and post-acquisition firm performance, using, abnormal share price performance, operating financial performance and intrinsic value performance metrics. This research used a non-representative, judgemental sample of 29 JSE listed firms to conclude that, on average, mergers and acquisitions destroy value within two years post-acquisition, although some evidence was found in support of acquiring firm value creation in the third year after the acquisition. Results indicated a significant -6.62% decline in acquiring firm average cumulative average abnormal return (ACAAR) between 504 trading days before and after acquisition announcement dates. This finding reversed in year three, resulting in a positive ACAAR of 8.76%. Similarly, average intrinsic value (AIV) performance indicated that between one year before and one year after the acquisition, AIV deteriorated with a significant -0.131. However, between year one and two after the acquisition, AIV recovered by 0.112. Overall evidence indicated positive and significant AIV growth of 0.370 between one year before and three years after the acquisition. The research found insignificant results for the pre and post-acquisition evaluation of industry-adjusted cash-flow return on all assets (IACRAA).
Download or read book Mergers and Acquisitions in the U S Banking Industry written by Gabriel A. Hawawini and published by North Holland. This book was released on 1990 with total page 252 pages. Available in PDF, EPUB and Kindle. Book excerpt: Presented in this book is a comprehensive empirical analysis of mergers and acquisitions in the U.S. banking industry. The purpose of the study is to examine the merger phenomenon in the banking industry by answering the following questions: - What are the incentives for banks to merge? - Has the prohibition of interstate banking prevented banks from diversifying and has it increased the rate of bank failures by restricting (geographical) diversification opportunities? - Are bank mergers wealth-creating activities and how are the gains/losses from a merger distributed between the acquiring and acquired bank shareholders? - How can the changes in shareholder wealth resulting from bank mergers be explained and are there differences between interstate and intrastate mergers? - What are the implications of the study's findings for regulatory policy? Theory and practical implications are blended in this book which should appeal to both academics and practitioners in the field
Download or read book The Effects of Inter industry Mergers and Acquisitions on the Long term Volatilty of Equity Returns written by Collin Douglas Myers and published by . This book was released on 2019 with total page 67 pages. Available in PDF, EPUB and Kindle. Book excerpt: The objective of this research was to discover whether a significant relationship exists between the theoretically diversifying effects of inter-industry mergers and acquisitions ("M&A") and changes in the volatilities of acquisitive firms' publicly-traded equity security returns (measured as the standard deviation of percentage changes in price) from pre-transaction announcement to post-transaction completion. My hypothesis is that a negative relationship should exist between changes in a firm' equity return volatility over time and whether the firm completes a diversifying acquisition, which I define as one in which the target firm primarily operates in a different industry than the acquirer. 980 diversifying and 9256 non-diversifying M&A transactions announced and completed between January 1980 and June 2017 were included in this research. When various systematic and idiosyncratic factors which affect the volatility of equity returns were controlled in a multiple regression, a statistically significant, negative relationship was discovered between whether a firm completes a diversifying acquisition and the change in the firm's equity return volatility from a pre-transaction announcement period to a post-transaction completion period. All factors considered in the multiple regression were found to be statistically significant. The multiple regression results also suggest that the most significant factors influencing changes in acquirers' equity return volatilities during the time periods surrounding M&A transactions are idiosyncratic.
