How M&A Experience Affects Firms’ Timing and Performance During Waves: A Study on M&A Decision Making Between Active and Inactive Acquirers During the Sixth Great Merger Wave
(2017) BUSN79 20171Department of Business Administration
- Abstract
- Purpose: This thesis delves into whether acquisition experience is both a valid indicator of increased acquirer returns and leads to participating at certain points during an M&A wave through examining the differences between active and inactive acquirers. This study seeks to provide further understanding of acquisitions during M&A waves with particular interest focused on domestic transactions in the U.S. during the sixth great merger wave.
Methodology: An event study following the market model is used to calculate abnormal and cumulative abnormal returns (CARs) for each acquisition. The results from the event study are then used as the dependent variables.
Theory: This thesis is influenced by two key theories of M&A. The first... (More) - Purpose: This thesis delves into whether acquisition experience is both a valid indicator of increased acquirer returns and leads to participating at certain points during an M&A wave through examining the differences between active and inactive acquirers. This study seeks to provide further understanding of acquisitions during M&A waves with particular interest focused on domestic transactions in the U.S. during the sixth great merger wave.
Methodology: An event study following the market model is used to calculate abnormal and cumulative abnormal returns (CARs) for each acquisition. The results from the event study are then used as the dependent variables.
Theory: This thesis is influenced by two key theories of M&A. The first includes the motives and causes driving acquisitions and merger waves. Second, how acquirer experience effects the timing, performance and returns when undergoing acquisitions in M&A waves.
Conclusions: We find significant negative returns for inactive acquirers regardless of what stage in the wave they participated in while active acquirers reported insignificant positive returns. These results indicate that, on average, experienced acquirers are more likely to create value for shareholders whereas inexperienced acquirers destroy value. The findings both support and test the extent theories indicating further research is still warranted for how M&A experience effects acquisition decision making. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/8911908
- author
- Whittall, Shiloh LU and Andersson, Axel LU
- supervisor
- organization
- course
- BUSN79 20171
- year
- 2017
- type
- H1 - Master's Degree (One Year)
- subject
- language
- English
- id
- 8911908
- date added to LUP
- 2017-07-05 16:20:05
- date last changed
- 2017-07-05 16:20:05
@misc{8911908,
abstract = {{Purpose: This thesis delves into whether acquisition experience is both a valid indicator of increased acquirer returns and leads to participating at certain points during an M&A wave through examining the differences between active and inactive acquirers. This study seeks to provide further understanding of acquisitions during M&A waves with particular interest focused on domestic transactions in the U.S. during the sixth great merger wave.
Methodology: An event study following the market model is used to calculate abnormal and cumulative abnormal returns (CARs) for each acquisition. The results from the event study are then used as the dependent variables.
Theory: This thesis is influenced by two key theories of M&A. The first includes the motives and causes driving acquisitions and merger waves. Second, how acquirer experience effects the timing, performance and returns when undergoing acquisitions in M&A waves.
Conclusions: We find significant negative returns for inactive acquirers regardless of what stage in the wave they participated in while active acquirers reported insignificant positive returns. These results indicate that, on average, experienced acquirers are more likely to create value for shareholders whereas inexperienced acquirers destroy value. The findings both support and test the extent theories indicating further research is still warranted for how M&A experience effects acquisition decision making.}},
author = {{Whittall, Shiloh and Andersson, Axel}},
language = {{eng}},
note = {{Student Paper}},
title = {{How M&A Experience Affects Firms’ Timing and Performance During Waves: A Study on M&A Decision Making Between Active and Inactive Acquirers During the Sixth Great Merger Wave}},
year = {{2017}},
}