The Influences of Merger and Acquisition on Firm Performance and Shareholder Wealth: the Evaluation of the US Bidder Firms

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He, Jingru (2014) The Influences of Merger and Acquisition on Firm Performance and Shareholder Wealth: the Evaluation of the US Bidder Firms. [Dissertation (University of Nottingham only)] (Unpublished)

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Abstract

Mergers and acquisitions (M&A) has been widely considered as an efficient strategy to realize the managerial goal, which is maximizing the shareholder wealth. Meanwhile, managers choose to engage in M&A deals in order to maintain their controlling power. The M&A transaction was first developed in the US market, which constitutes as a dynamic market that most studies have been interested in. There exists consensus provided by previous empirical studies that M&A can enhance the target firms’ shareholder wealth. However, varied results have been reported for the bidders. Some reveal that bidders can raise positive gains from M&A deals, while other researchers argue there is zero or even negative returns to bidders.

This study focuses on 275 M&A transactions in the US market between 2000 to 2010, and tries to figure out whether bidders can generate significant positive returns within short-term period surrounding the M&A announcement. By implementing both the market model and the market adjusted model, it reveals that bidders returns are not significantly different from zero during either [-3, +3] or [-1, +1] event window period. In addition, considering the payment method, bidder firm size, relative size and corporate performance, the multivariate regression model is established to examine effects of those variables on the cumulative abnormal returns (CAR) to bidders. It turns out that most variables are insignificantly associated with bidders return.

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 11 Nov 2014 16:42
Last Modified: 19 Oct 2017 13:59
URI: https://eprints.nottingham.ac.uk/id/eprint/27395

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