Download or read book Market Reaction of Rivals to Mergers and Acquisitions Announcements written by and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Announcement Effect on Acquirers Rivals in M A Deals written by Philipp Hutter and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis studies the short-term wealth effect experienced by industry competitors of American acquirers announcing an M&A deal. The event study methodology is applied to investigate the stock price reactions of 1178 non-merging rivals corresponding to 394 deal announcements. The empirical analysis shows that on average competitors earn statistically significant abnormal returns of 0.49% and 0.57% over a two and three day event window respectively. This reveals the picture of a generally positive announcement effect on non-merging rivals. However, the dispersion of the observed market reactions is very heterogeneous which confirms the results of prior studies. A multivariate linear regression analysis is conducted in order to analyze the influence of potential determinants on the observed abnormal returns. The announcement effect experienced by the acquiring firm shows a significantly positive impact on the announcement effect of industry counterparts. Based on this finding it may be inferred that the majority of the deals is non-synergistic. The positive correlation between the wealth effects experienced by acquirers and rivals could stem from increased market power of all industry players due to consolidation or from a favorable signaling effect. Furthermore, a rival's absolute size has an adverse impact on the observed wealth effect which may indicate that large companies have a lower ability to exploit short-term opportunities or to escape threats from merger activities by their competitors. Finally, if an American buyer acquires a foreign target the announcement effect on non-merging rivals is affected adversely. It could be inferred that cross-border transactions result in more synergistic takeovers than domestic mergers.
Download or read book Intra Industry Effect of M A Announcements in the North American Market written by Maurice Niquille and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates stock prices reactions of rival firms due to an M&A announcement. In particular it analyzes the different reactions of the stock prices of the peers of the acquiring and the target companies. According to the Information signaling effect and the comparative advantage theory either a positive or a negative reaction can occur as a result of an announcement, depending on which effect is dominating. With a large sample of North American mergers and acquisitions between 2000 and 2013 it should be proven, that corporate announcements are not only influencing the involved firms. Even more, a whole industry can be affected by the new information and the changes in the relative market positions. For the analytical part of the study the approach of an event study is chosen, supported by a multiple linear regression. This study finds, that in general peers of an acquirer benefit from an announcement whereas rivals of the target side suffer significant negative abnormal return. Additionally the paper finds evidence, that the regulation of an industry, the amount of direct competitors, the size of the peer companies and the financial crises have a significant impact on the abnormal returns of the rival firms. Corporate fundamentals to the contrary have a comparatively small influence and explanation power. There is also no evidence, that the amount of previous transactions within an industry is influencing the overall abnormal returns of rival firms.
Download or read book Rival Reactions Do Value Increasing Mergers Bolster Monopoly Rents for Strong Rivals written by Eric de Bodt and published by . This book was released on 2014 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: Mergers and acquisitions (M&As) are major events, potentially reshaping competition among industry rivals. Despite their seeming importance, the existing literature reports only a limited impact of M&As on the competitive environment. Our paper revisits this issue using a novel approach that characterizes the intensity and the nature of industry peers interactions. Using idiosyncratic return co-movements, we filter out unrelated firms and distinguish business partners from competitors. We then study rival reactions to horizontal M&A announcements conditionally on their status (business partners versus competitors). The results suggest that M&As dampen competition; this represents the first large scale empirical support for the market power hypothesis.
Download or read book Acquisition Announcements and Stock Market Valuations of Acquiring Firms Rivals written by Ajai Gaur and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: To examine the impact of acquisition announcements on the stock market returns of rivals of the acquiring firms, we propose a growth probability hypothesis: when an acquisition is announced, it signals the potential for future growth in the acquirer's industry to the market, resulting in positive stock market reactions to rivals of the acquiring firms. We test the growth probability hypothesis with a longitudinal sample of Chinese domestic and cross-border acquisitions during 1993-2008. The results provide robust support for this hypothesis as a means to explain market reactions to rivals of acquiring firms. We also empirically test and negate alternative theoretical explanations advanced in prior literature to explain positive market reactions to rivals of the target firms.
Download or read book Mergers and Acquisitions Performance consequences written by Simon Peck and published by Taylor & Francis. This book was released on 2002 with total page 494 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 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 Bank Mergers and Acquisitions in the Asia Pacific Region written by Sascha Kolaric and published by Corporate Finance and Governance. This book was released on 2015 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book offers a comprehensive analysis of the shareholder wealth effects of the financial sector consolidation in the Asia-Pacific region and its impact on the acquirer's cost of debt. The capital market reactions of the institutions directly involved in the M&A and their rivals are examined to evaluate the success of the consolidation process.
Download or read book The Measurement of the Market s Reaction to Merger Announcements written by Alovsat Muslumov and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper measures the capital markets' reaction to merger announcements within the announcement month using the sample of 37 mergers from USA. Research findings indicate that targets earn positive average abnormal returns of 19 percent that is statistically significant, whereas acquirers earn positive average abnormal returns of 5 percent that is not statistically significant. The weighted average of the abnormal returns to acquirer and targets is 7 percent and statistically significant. These results indicate that the gains around the merger announcements reflect synergetic gains, not the wealth transfer from acquirer shareholders to target's. The method of payment, business overlap degree of acquirer's and target's industries and the price-to-book ratio of acquirers significantly affect the division of the synergetic gains between the shareholders of target and acquirer firms.
Download or read book Information Signaling and Competitive Effects of M A written by Christian Funke and published by . This book was released on 2010 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we investigate the long term performance of rival companies related to acquisition targets. Using a sample of 2,511 deals from 1985 to 2005, we document an under-reaction of capital markets to the information contained in Mamp;A announcements. Following 6,138 large rival gain events due to positive information signaling and 5,408 large rival loss events due to the negative competitive effects of the deal, we observe a return drift for up to 12 months after the announcement. Hence, our results indicate that capital markets do not immediately incorporate the effects of Mamp;A announcements into rival stock prices.
Download or read book Mergers Acquisitions in the Machinery Industry written by Florian Geiger and published by Springer Science & Business Media. This book was released on 2010-11-09 with total page 145 pages. Available in PDF, EPUB and Kindle. Book excerpt: Which motives initiate managers to merge or to acquire other corporations? While there is a long-lasting history of empirical research on M&A in a cross-industry context, our knowledge about industry specific drivers of M&A is more than limited. Given this background, the machinery industry is an attractive segment to address questions on M&A motives – as it is on the one hand a very fragmented industry and on the other hand a bundle of in some parts highly consolidated sub-industries. In his thesis, Mr. Geiger makes an effort to answer the question why firms in the machinery industry follow M&A strategies and how successful they are in their transactions. This is not only a remarkable endeavour because Mr. Geiger uses some hand selected unique datasets, but in particular, because he presents state-of-the-art analyses which are competitive and meet highest international standards. The thesis on hand carefully identifies and addresses open research questions related to M&A strategies in a very specific industry. Its primary objective was to identify M&A motives for different types of companies in various sub-segments of the machinery industry by analyzing stock price and accounting data. Thusly objectifying managerial action allows deriving recommendations for financing practice.
Download or read book Right Game written by Adam Brandenburger and published by Harvard Business Review Press. This book was released on 2009-10-01 with total page 99 pages. Available in PDF, EPUB and Kindle. Book excerpt: Business is like war: The best combatant wins while the worst loses, right? Not necessarily. Companies can succeed spectacularly without destroying others. And they can lose miserably after competing well. Exceptional businesses win by actively shaping the game they're playing, not playing the game they find. The Right Game shows you how to do this—by altering who's competing, what value each player brings to the table, and which rules and tactics players use. Since 1922, Harvard Business Review has been a leading source of breakthrough ideas in management practice. The Harvard Business Review Classics series now offers you the opportunity to make these seminal pieces a part of your permanent management library. Each highly readable volume contains a groundbreaking idea that continues to shape best practices and inspire countless managers around the world.
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 Rival Stock Price Reactions to Large BHC Acquisition Announcements written by Gary Whalen and published by . This book was released on 1986 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt:
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 Mergers and Acquisitions Motivaton written by Simon Peck and published by Taylor & Francis. This book was released on 2002 with total page 456 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 The International Handbook of Competition written by Manfred Neumann and published by Edward Elgar Publishing. This book was released on 2013-01-01 with total page 431 pages. Available in PDF, EPUB and Kindle. Book excerpt: ÔThis comprehensive Handbook demonstrates that academic thinking, new and old, has a role to play in shaping modern competition policy.Õ Ð Gunnar Niels, Oxera This indispensable Handbook examines the interface of competition policy, competition law and industrial economics. The book aims to further our understanding of how economic reasoning and legal expertise complement each other in defining the fundamental issues and principles in competition policy. In specially commissioned chapters the book provides a scholarly review of economic theory, empirical evidence and standards of legal evaluation with respect to monopolization of markets, exploitation of market power and mergers, among other issues. The International Handbook of Competition Ð Second Edition will be accessible to a wide audience including students of economics and law, public administrators, lawyers, consultants, and business executives.
