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Characteristics of Mergers and Acquisitions in the European Union Food Industry

Tran Phung, Evelina and Omeragic, Haris (2010)
Department of Business Administration
Abstract
Purpose: This study aims at determining the financial characteristics of takeover targets in the food industry operating in the European Union. By using the logit model, the researchers intend to identify firm targeting behavior that might explain corporate takeover decisions of food and beverage companies in 1999 to 2008 period. Theoretical framework: The theory is based on explaining the motives behind takeover targets, mainly with a focus on the economic perspective. This is because the study’s central issue concerns financial characteristics of targeted firms. Four different but commonly known economic theories are presented, to each of them hypotheses are formulated. Methodology: Financial data of M&A deals occurred in the food and... (More)
Purpose: This study aims at determining the financial characteristics of takeover targets in the food industry operating in the European Union. By using the logit model, the researchers intend to identify firm targeting behavior that might explain corporate takeover decisions of food and beverage companies in 1999 to 2008 period. Theoretical framework: The theory is based on explaining the motives behind takeover targets, mainly with a focus on the economic perspective. This is because the study’s central issue concerns financial characteristics of targeted firms. Four different but commonly known economic theories are presented, to each of them hypotheses are formulated. Methodology: Financial data of M&A deals occurred in the food and beverage manufacturing industry in the European Union between 1999 and 2008 is gathered. A control group of non-target firms representing the same industry and matched by year is used. In order to find the drivers of targets involving in takeover bids, a logit regression is applied using the historical ratios estimated for targets and non-targets. Conclusion: Two variables, liquidity and market-to-book, are found as statistically significant, indicating an increased target probability among firms with a specific level of ratio values. Merging and acquiring companies tend to takeover food and beverage manufacturers that are less liquid and whose assets have high market values. No significant evidence is found on the other variables. (Less)
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author
Tran Phung, Evelina and Omeragic, Haris
supervisor
organization
year
type
H1 - Master's Degree (One Year)
subject
keywords
characteristics, food and beverage manufacturing industry, European Union, mergers and acquisitions, logit model, Management of enterprises, Företagsledning, management
language
Swedish
id
1625080
date added to LUP
2010-06-07 00:00:00
date last changed
2012-04-02 18:06:27
@misc{1625080,
  abstract     = {Purpose: This study aims at determining the financial characteristics of takeover targets in the food industry operating in the European Union. By using the logit model, the researchers intend to identify firm targeting behavior that might explain corporate takeover decisions of food and beverage companies in 1999 to 2008 period. Theoretical framework: The theory is based on explaining the motives behind takeover targets, mainly with a focus on the economic perspective. This is because the study’s central issue concerns financial characteristics of targeted firms. Four different but commonly known economic theories are presented, to each of them hypotheses are formulated. Methodology: Financial data of M&A deals occurred in the food and beverage manufacturing industry in the European Union between 1999 and 2008 is gathered. A control group of non-target firms representing the same industry and matched by year is used. In order to find the drivers of targets involving in takeover bids, a logit regression is applied using the historical ratios estimated for targets and non-targets. Conclusion: Two variables, liquidity and market-to-book, are found as statistically significant, indicating an increased target probability among firms with a specific level of ratio values. Merging and acquiring companies tend to takeover food and beverage manufacturers that are less liquid and whose assets have high market values. No significant evidence is found on the other variables.},
  author       = {Tran Phung, Evelina and Omeragic, Haris},
  keyword      = {characteristics,food and beverage manufacturing industry,European Union,mergers and acquisitions,logit model,Management of enterprises,Företagsledning, management},
  language     = {swe},
  note         = {Student Paper},
  title        = {Characteristics of Mergers and Acquisitions in the European Union Food Industry},
  year         = {2010},
}