Long-term performance and Method of Payment: A study of the Nordic Mergers and Acquisitions Market
(2023) BUSN79 20231Department of Business Administration
- Abstract
- Purpose: The purpose of this study is to test how Nordic acquirers perform post M&A deals and to what extent the Method of Payment affects this performance. An additional analysis is also conducted where the above is tested, conditional on the financial constraints of the acquirer.
Methodology: To obtain the long-term performance (BHAR) of Nordic acquirers, an event study has been conducted. To test the performance and relationship to the method of payment two t-tests have also been conducted. Lastly, several OLS regressions have been run to test the relationship between BHAR, Method of Payment and Financial Constraints, where all models have been run with Robust standard errors. Additional robustness tests have been conducted.
... (More) - Purpose: The purpose of this study is to test how Nordic acquirers perform post M&A deals and to what extent the Method of Payment affects this performance. An additional analysis is also conducted where the above is tested, conditional on the financial constraints of the acquirer.
Methodology: To obtain the long-term performance (BHAR) of Nordic acquirers, an event study has been conducted. To test the performance and relationship to the method of payment two t-tests have also been conducted. Lastly, several OLS regressions have been run to test the relationship between BHAR, Method of Payment and Financial Constraints, where all models have been run with Robust standard errors. Additional robustness tests have been conducted.
Theoretical perspective: Signalling theory, Free cash flow theory, hubris theory.
Empirical Foundation: The analysis is based on a comprehensive examination of 167 M&A deals made between public companies over the period 2004-2022 in the Nordic region. The data is collected on Refinitiv Eikon, Capital IQ, and Zephyr.
Conclusion: This thesis provides evidence of negative BHAR of -2,8 % for Nordic acquirers over a one-year horizon following M&A transactions. We also provide significant evidence that firms using all-cash offers (0,3 %) outperform acquirers using stock- or mixed offers (-7,1 %). This study does not obtain any evidence that the above conclusions differ depending on acquirer financial constraints. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9131208
- author
- Svensson, Jonathan LU and Boudabbous, Zied LU
- supervisor
-
- Marco Bianco LU
- organization
- course
- BUSN79 20231
- year
- 2023
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- M&A, BHAR, Method of Payment, The Nordic Region, Financial Constraints.
- language
- English
- id
- 9131208
- date added to LUP
- 2023-09-12 14:26:27
- date last changed
- 2023-09-12 14:26:27
@misc{9131208,
abstract = {{Purpose: The purpose of this study is to test how Nordic acquirers perform post M&A deals and to what extent the Method of Payment affects this performance. An additional analysis is also conducted where the above is tested, conditional on the financial constraints of the acquirer.
Methodology: To obtain the long-term performance (BHAR) of Nordic acquirers, an event study has been conducted. To test the performance and relationship to the method of payment two t-tests have also been conducted. Lastly, several OLS regressions have been run to test the relationship between BHAR, Method of Payment and Financial Constraints, where all models have been run with Robust standard errors. Additional robustness tests have been conducted.
Theoretical perspective: Signalling theory, Free cash flow theory, hubris theory.
Empirical Foundation: The analysis is based on a comprehensive examination of 167 M&A deals made between public companies over the period 2004-2022 in the Nordic region. The data is collected on Refinitiv Eikon, Capital IQ, and Zephyr.
Conclusion: This thesis provides evidence of negative BHAR of -2,8 % for Nordic acquirers over a one-year horizon following M&A transactions. We also provide significant evidence that firms using all-cash offers (0,3 %) outperform acquirers using stock- or mixed offers (-7,1 %). This study does not obtain any evidence that the above conclusions differ depending on acquirer financial constraints.}},
author = {{Svensson, Jonathan and Boudabbous, Zied}},
language = {{eng}},
note = {{Student Paper}},
title = {{Long-term performance and Method of Payment: A study of the Nordic Mergers and Acquisitions Market}},
year = {{2023}},
}