Empirical Investigation of the medium of exchange in Mergers and Acquisitions

REN, JIE (2010) Empirical Investigation of the medium of exchange in Mergers and Acquisitions. [Dissertation (University of Nottingham only)] (Unpublished)

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Abstract

This paper examines the choice of payment methods in mergers and acquisition (M&A) and the associated post-acquisition performance based on a study of selected 129 transactions during 1990 and 2008.

We find that the choice of payment methods is affected by a wide range of factors including company valuation, transaction size, management control, market expectation and stock valuation.

In addition, we also observe a significant relationship between payment methods and post-acquisition returns from a long-term perspective. Consistent with most previous evidence, we find that cash payment will contribute to the highest post-acquisition returns to the shareholders of the acquiring firms. On top of that, it is further explored that merger types also have impact on the post-acquisition performance. According to our results, only conglomerate acquisitions tend to contribute positive shareholders value; by contrast, horizontal and vertical mergers are highly unprofitable.

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 19 Jan 2011 10:13
Last Modified: 22 Oct 2016 19:35
URI: http://eprints.nottingham.ac.uk/id/eprint/24026

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