Skip to main content

LUP Student Papers

LUND UNIVERSITY LIBRARIES

Deal or No Deal

Serrano, Alexander LU and Fevre, Lucas LU (2023) BUSN79 20231
Department of Business Administration
Abstract (Swedish)
Purpose: The purpose of the thesis is to investigate if deal completion probability is associated with the stock market’s initial reaction to the M&A announcement. Furthermore, the study aims to explore if other characteristics have a relationship with deal completion, and if they have a moderating effect on the relationship with deal completion and the stock market’s reaction.
Methodology: We use a probit model to estimate how the dependent variables affect the probability of deal completion. We also conduct a series of robustness tests and univariate analysis to substantiate our results.
Theoretical perspectives: To make sense of our results, we use the theories of shareholder value perspective, efficient market hypothesis, manager... (More)
Purpose: The purpose of the thesis is to investigate if deal completion probability is associated with the stock market’s initial reaction to the M&A announcement. Furthermore, the study aims to explore if other characteristics have a relationship with deal completion, and if they have a moderating effect on the relationship with deal completion and the stock market’s reaction.
Methodology: We use a probit model to estimate how the dependent variables affect the probability of deal completion. We also conduct a series of robustness tests and univariate analysis to substantiate our results.
Theoretical perspectives: To make sense of our results, we use the theories of shareholder value perspective, efficient market hypothesis, manager learning, hubris and information asymmetry.
Empirical foundation: Using the SDC’s Refinitiv EIKON database, we collect a sample of 589 Nordic M&A deals between 2010 and 2023.
Conclusions: We find no evidence that the stock market’s initial reaction to the M&A announcement, targets on unregulated stock exchanges, or the experience of M&A advisors affect M&A deal completion probability. However, serial acquirers have a significant negative relationship with deal completion. Additionally, we find no evidence that any of these characteristics have any moderating effect on the relationship between deal completion and the stock market’s reaction. These results are robust using 9 different robustness tests. (Less)
Please use this url to cite or link to this publication:
author
Serrano, Alexander LU and Fevre, Lucas LU
supervisor
organization
course
BUSN79 20231
year
type
H1 - Master's Degree (One Year)
subject
keywords
“M&A deal completion”, “Manager learning”, “Unregulated stock exchanges”, “Serial acquirers”, “M&A advisors”
language
English
id
9121777
date added to LUP
2023-09-12 13:34:02
date last changed
2023-09-12 13:34:02
@misc{9121777,
  abstract     = {{Purpose: The purpose of the thesis is to investigate if deal completion probability is associated with the stock market’s initial reaction to the M&A announcement. Furthermore, the study aims to explore if other characteristics have a relationship with deal completion, and if they have a moderating effect on the relationship with deal completion and the stock market’s reaction.
Methodology: We use a probit model to estimate how the dependent variables affect the probability of deal completion. We also conduct a series of robustness tests and univariate analysis to substantiate our results.
Theoretical perspectives: To make sense of our results, we use the theories of shareholder value perspective, efficient market hypothesis, manager learning, hubris and information asymmetry.
Empirical foundation: Using the SDC’s Refinitiv EIKON database, we collect a sample of 589 Nordic M&A deals between 2010 and 2023.
Conclusions: We find no evidence that the stock market’s initial reaction to the M&A announcement, targets on unregulated stock exchanges, or the experience of M&A advisors affect M&A deal completion probability. However, serial acquirers have a significant negative relationship with deal completion. Additionally, we find no evidence that any of these characteristics have any moderating effect on the relationship between deal completion and the stock market’s reaction. These results are robust using 9 different robustness tests.}},
  author       = {{Serrano, Alexander and Fevre, Lucas}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Deal or No Deal}},
  year         = {{2023}},
}