Mergers and acquisitions announcement and stock price reaction: evidence from Asia Pacific media and telecommunications industryTools Govinasamy, Mahadhevan (2018) Mergers and acquisitions announcement and stock price reaction: evidence from Asia Pacific media and telecommunications industry. [Dissertation (University of Nottingham only)]
AbstractThis study investigates the impact of Merger & Acquisitions (M&A) announcements on the value of shareholders of acquirers in the media and telecommunication industry within the Asia Pacific region. It examines market reactions of 84 companies of mergers and acquisition (M&A) deals during the 5-year period from 2012 to 2017. The event study methodology was used for estimating abnormal returns for the acquiring companies in this period. In the context of semi-strong form of efficient market theory, these announcements provide a unique opportunity to analyse the effects of M&A deals on the price formation process in the Asia Pacific region. The empirical results indicate that shareholders of the acquiring companies gain statistically significant positive abnormal returns for the 31-days [-15, +15] event window centred on announcement day. The results show that companies in developed countries react positively to the M&A deals while share returns of media acquirers gain significant positive abnormal returns. The results also show that both cash and non-cash payment method resulted in significant positive abnormal returns. As both the industry converges, government authorities should implement friendly policies which promotes research and development, encourage knowledge sharing, provides funding and investment incentives so that all players benefit in the industry.
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