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 Impact of Mergers and Acquisitions Announcements on the Share Price Performance of Acquiring Companies written by Mthabisi Ndlovu and published by . This book was released on 2017 with total page 90 pages. Available in PDF, EPUB and Kindle. Book excerpt:
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 The Announcement Share Price Performance of Acquiring Firms written by Sandra Maaike Lof and published by LAP Lambert Academic Publishing. This book was released on 2011-10 with total page 96 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book describes the value generated to the shareholders of acquiring companies by the announcement of mergers and acquisitions. Cumulative Abnormal Announcement Returns to those shareholders, due to the announcement of a merger or acquisition, reflect a possible revision of the expected value resulting from boosted economies of scale, future synergies or wealth redistribution among stakeholders. The author investigated how bidder returns dispersed in 168 acquisitions by Dutch companies, and whether or not this dispersion can be explained based upon nine explanatory variables, being Announcement date equals rumour date, Domestic or cross border acquisitions, Payment type, Industry similarity between bidder and target, Public or private target, Owner control in the bidding company, Relative size of the target, Bidder acquisition experience and Market timing. These variables serve as determinants, of which some prove to have a positive or negative influence on the CAAR. Some determinants however have (according to prior empirical research) a positive effect on the announcement share price. A must for all shareholders of acquiring firms acting as bidders in a takeover.
Download or read book Mergers and Acquisitions written by David R. King and published by Routledge. This book was released on 2018-10-30 with total page 158 pages. Available in PDF, EPUB and Kindle. Book excerpt: The process of identifying and evaluating a target firm, completing a deal after its negotiation and announcement, and then integrating a target firm after legal combination is a multi-year process with uncertain returns to acquiring firms. Research on mergers and acquisitions (M&As) is progressing rapidly yet it remains fragmented across multiple research perspectives that largely examine different acquisition phases separately and coincide with a focus on different research variables. As a result, research fragmentation means that a researcher in one area may be unaware of research from related areas that is likely relevant. This contributes to research silos with M&A research displaying different traditions, starting points, and assumptions. Mergers and Acquisitions: A Research Overview summarizes the frontier in M&A research and provides insights into where it can be expanded. It undertakes the needed integration and reconciliation of research in order to derive practical knowledge for managing acquisitions from beginning to end, providing a summary of what is known and its implications for future research. This concise overview reconciles and integrates the state of the art in our understanding of mergers and acquisitions, providing an essential first stopping point in the research journey of students and scholars working in this area.
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 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 Mergers and Acquisitions written by G. Gregoriou and published by Springer. This book was released on 2007-11-13 with total page 292 pages. Available in PDF, EPUB and Kindle. Book excerpt: This collection of exclusive articles presents the latest research in the area of mergers and acquisitions. It presents what drives corporate performance under different economic conditions, both in the US and across the globe, and examines the role of mergers and acquisitions in maintaining the efficiency of world markets.
Download or read book The Financial Impact of Post Mergers and Acquisitions Short Run Share Price Performance of Acquiring Firms in Hong Kong written by Chun Wing Dorothy Chiu and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the financial impact of post-mergers and acquisitions by delving into the short-run stock performance of acquiring firms, if and how deal characteristics affect the (cumulative) announcement abnormal return in a developed financial market- Hong Kong. I hypothesize that (cumulative) abnormal returns of buyers are positive around announcements, deals that belong to industry-irrelated, cash-financed, cross-border, and privately-owned targets would overperform, while large deal values would underperform. From a sample of 60 M&A deals from 2018 to 2022 initiated in Hong Kong, my results show a positive relationship between the share price performance of buyers and post-announcement period. Industry-related deals worsen, mergers and large-value deals benefit the stock performance of acquiring firms, while cash payment, cross-border, and private deals do not play a significant role. This paper contributes to the M&A academia by grasping the recent post-M&A performance in the Asian financial market and detecting a significant alignment between the form of deal and (cumulative) announcement abnormal return.
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 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 Returns to Shareholders of Acquiring and Acquired Companies written by Alfred E. Osborne and published by . This book was released on 1980 with total page 48 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 Advances in Mergers and Acquisitions written by Sydney Finkelstein and published by Emerald Group Publishing. This book was released on 2022-09-14 with total page 167 pages. Available in PDF, EPUB and Kindle. Book excerpt: Advances in Mergers and Acquisitions stands out from the competition due to its focus on three key characteristics: studies from scholars in different countries, with different research questions, relying on different theoretical perspective.
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 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 Mergers and Acquisitions written by Adam Zaremba and published by . This book was released on 2016 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: The aim of this paper is to provide fresh-out of sample evidence on short-term and long-term performance following announcement of mergers and acquisitions. The research is based on 109 M&A deals in Central and Eastern European countries for years 2001-2014. For the short-horizon event studies, we use ACAR approach, and measure abnormal returns with zero, index and market models. For the long-run studies, we build equally and value weighted calendar portfolios and test their performances with CAPM, three-factor and four-factor models. We document positive and significant short-term abnormal returns on acquiring and target companies in the first weeks following the transaction announcement. Second, we find long-run non-significant negative abnormal returns of acquiring companies.
