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Acquirers’ performance in- and off-merger waves - A study of the Nordic countries

Eskelinen, Tuomas LU and Söron, Philip LU (2018) BUSN79 20181
Department of Business Administration
Abstract
Purpose:

The purpose of this research is to examine and compare the Nordic acquirers’ merger and acquisitions performance in two different
market settings, defined as: in- and off-merger wave. Furthermore, the authors intend to examine and compare which transaction- and company specific characteristics perform better in both periods.

Methodology:

This research is classified as quantitative research, which utilizes event study as the main method. In addition, cross-sectional regression is used to measure company specific drivers of abnormal returns.

Theoretical perspective:

Relevant merger and acquisition theory in combination with relevant previous research are used to enhance the depth of the analysis.

Empirical... (More)
Purpose:

The purpose of this research is to examine and compare the Nordic acquirers’ merger and acquisitions performance in two different
market settings, defined as: in- and off-merger wave. Furthermore, the authors intend to examine and compare which transaction- and company specific characteristics perform better in both periods.

Methodology:

This research is classified as quantitative research, which utilizes event study as the main method. In addition, cross-sectional regression is used to measure company specific drivers of abnormal returns.

Theoretical perspective:

Relevant merger and acquisition theory in combination with relevant previous research are used to enhance the depth of the analysis.

Empirical Foundation:

Mergers and acquisitions done by Nordic acquirers in 2001-2002 and 2009-2013 were identified as off-merger wave period. In addition, mergers and acquisitions done by Nordic acquirers during
2003-2007 were identified as in-merger wave period.

Conclusion:

Nordic companies engaging in acquisitions outside a merger wave created approximately 1,18% more abnormal returns on average than companies which acquired inside a merger wave. In addition,equity deals in both in- and off-merger wave was found to generate the most value over other payment methods. Thus, if one were to maximize the value of the acquisitions, it can be argued to be the
most value adding to acquire outside a merger wave and finance the deal with equity. The research also found that equity may not be a
signal of under- or overvaluation. (Less)
Please use this url to cite or link to this publication:
author
Eskelinen, Tuomas LU and Söron, Philip LU
supervisor
organization
course
BUSN79 20181
year
type
H1 - Master's Degree (One Year)
subject
keywords
Mergers and Acquisitions (M&A), In-merger Wave, Off-merger Wave, Cumulative Abnormal Returns (CAR), Event Study, Value Creation.
language
English
id
8955309
date added to LUP
2018-08-03 16:03:00
date last changed
2018-08-03 16:03:00
@misc{8955309,
  abstract     = {Purpose:

The purpose of this research is to examine and compare the Nordic acquirers’ merger and acquisitions performance in two different
market settings, defined as: in- and off-merger wave. Furthermore, the authors intend to examine and compare which transaction- and company specific characteristics perform better in both periods.

Methodology:

This research is classified as quantitative research, which utilizes event study as the main method. In addition, cross-sectional regression is used to measure company specific drivers of abnormal returns.

Theoretical perspective:

Relevant merger and acquisition theory in combination with relevant previous research are used to enhance the depth of the analysis.

Empirical Foundation:

Mergers and acquisitions done by Nordic acquirers in 2001-2002 and 2009-2013 were identified as off-merger wave period. In addition, mergers and acquisitions done by Nordic acquirers during
2003-2007 were identified as in-merger wave period.

Conclusion:

Nordic companies engaging in acquisitions outside a merger wave created approximately 1,18% more abnormal returns on average than companies which acquired inside a merger wave. In addition,equity deals in both in- and off-merger wave was found to generate the most value over other payment methods. Thus, if one were to maximize the value of the acquisitions, it can be argued to be the
most value adding to acquire outside a merger wave and finance the deal with equity. The research also found that equity may not be a
signal of under- or overvaluation.},
  author       = {Eskelinen, Tuomas and Söron, Philip},
  keyword      = {Mergers and Acquisitions (M&A),In-merger Wave,Off-merger Wave,Cumulative Abnormal Returns (CAR),Event Study,Value Creation.},
  language     = {eng},
  note         = {Student Paper},
  title        = {Acquirers’ performance in- and off-merger waves - A study of the Nordic countries},
  year         = {2018},
}