The Effect of Merger and Acquisition Announcement on Stock Return in U.S. Communications Industry PDF Download
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Author: Ningsih Wijaya Dharma-Wijaya
Publisher:
ISBN:
Category : Communication and traffic
Languages : en
Pages : 160
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Book Description
Author: Ningsih Wijaya Dharma-Wijaya
Publisher:
ISBN:
Category : Communication and traffic
Languages : en
Pages : 160
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Book Description
Author: Ulku Yaylacicegi
Publisher:
ISBN:
Category : Telecommunication equipment industry
Languages : en
Pages : 368
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Author: Maurice Niquille
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This study investigates stock prices reactions of rival firms due to an M&A announcement. In particular it analyzes the different reactions of the stock prices of the peers of the acquiring and the target companies. According to the Information signaling effect and the comparative advantage theory either a positive or a negative reaction can occur as a result of an announcement, depending on which effect is dominating. With a large sample of North American mergers and acquisitions between 2000 and 2013 it should be proven, that corporate announcements are not only influencing the involved firms. Even more, a whole industry can be affected by the new information and the changes in the relative market positions. For the analytical part of the study the approach of an event study is chosen, supported by a multiple linear regression. This study finds, that in general peers of an acquirer benefit from an announcement whereas rivals of the target side suffer significant negative abnormal return. Additionally the paper finds evidence, that the regulation of an industry, the amount of direct competitors, the size of the peer companies and the financial crises have a significant impact on the abnormal returns of the rival firms. Corporate fundamentals to the contrary have a comparatively small influence and explanation power. There is also no evidence, that the amount of previous transactions within an industry is influencing the overall abnormal returns of rival firms.
Author: Samer Moussa Soubra
Publisher:
ISBN:
Category :
Languages : en
Pages : 104
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Book Description
In this project, we try to find a relationship between the different types of merger and acquisition deals in the telecommunications industry and the market reaction to these deals. We notably search for a difference in the reaction to horizontal and vertical integration attempts by telecommunications companies. We also look at different factors that affect this market reaction and we test for the presence of an early mover advantage for companies that venture into mergers and acquisitions at the beginning of the industry's consolidation wave.--Our analysis for the short term and long term abnormal returns do not show a significant difference between the market reaction to vertical and horizontal deals. However, we find that other factors like the payment method, nature of the deal whether cross border or domestic and the nationality of the acquirer and target affect the market reaction to the deal announcement. Deals where the payment is made in cash and early movers benefit from a clear advantage while cross border deals tend to induce a more negative reaction. There is also a case of home bias where vertical deals undertaken by US acquirers in their home market generate a positive market reaction while they generate a negative reaction when the deal is cross border.
Author: Leen Obeidat
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This research paper aims to analyze a popular investment strategy in the technology and telecommunications market sectors. Over the years, it has been evident that many companies in these industries believe that the larger they grow in size, the better. This study challenges that notion by assessing the effect of frequent mergers and acquisitions on market capitalization and comparing the results of companies that merge and acquire frequently with comparison companies that do so less frequently.The hypothesis undergirding this thesis research is to see whether there is a difference between companies that frequently acquire or merge with other companies and those that do not. For the purposes of this study, the median split method was utilized to divide the largest companies within two market sectors (technology and telecommunications) into two groups and assess the change in market capitalization over a ten-year period. Then correlation and regression methods were used to further analyze the data.This analysis focuses on the largest wireless providers and the largest Internet companies by total revenue in the United States in the fiscal year 2016-2017. The analysis captures performance data from 2007 until 2017. After studying these, it is concluded that contrary to the dominant narrative that frequent mergers and acquisitions are good for business, there is no clear difference between high and low M&A investment strategy on market capitalization. Companies in both industries performed well in some instances and not very well in others. These findings raise questions about the popular notion that growing larger in these industries is a road to success, but rather that each company should customize its strategy to fit its needs.
Author: Ulku Yaylacicegi
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Author: Dr. Amir Rafique
Publisher:
ISBN:
Category :
Languages : en
Pages : 32
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Book Description
Mergers and acquisition are not only related to accounting measures of performance of firms but it also affects the wealth of shareholders either positively or negatively. According to Hubris hypothesis, the merger and acquisition announcement brings negative effect to shareholders wealth and decreases the abnormal return in post period. The present study took this analysis separate for long and short run period. To capture immediate effect on shareholders return study used Market Model to calculate abnormal returns and employed the t-test on it to check the significant differences in two sample data set. Out of 12 cases of M&A eight mergers showed negative abnormal returns for post period with statistical significance at 1% level, two at 5% and two acquiring firms reduced returns were not statistically significant. Overall on the basis of most of M&A results, the study concluded consistent results with earlier studies. The long run analysis employed by using Ohlson (1995) model for firm value with introducing dummy variable for the pre and post period. The results indicated coefficient of dummy for merger was -0.52 with statistical significance at 1% level which is demonstrating negative effect on share price which ultimately reduces the returns. The study concluded that merger and acquisition announcement bring negative effect on shareholders return either for short run or long time period.
Author: Alexandre Robert Mounier
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
The telecommunications industry is among the most dynamic industries in terms of mergers and acquisitions activity. Yet, only few studies have been concerned with the particular challenges and dynamics telecommunications firms face when engaging in takeover activity. This thesis addresses this gap and contributes to existing re- search by investigating influencing factors and their performance implications for mergers and acquisitions in the U.S. telecommunications industry. The analysis is conducted using a five-day event study methodology based on abnormal returns in combination with ordinary least squares and weighted least squares regressions. The evidence obtained suggests that on average, related acquisitions are expected to out- perform unrelated acquisitions with an underlying U-shaped pattern, and acquirer experience and acquisition timing also exhibit a curvilinear linkage to market expectations about firm performance. The results of this thesis emphasize the importance for managers to consider the particular setting of their acquisitions along with the need to clearly communicate how an acquisition fits into an overall corporate strategy, and how it is to be evaluated with respect to the competitive positioning of the firm.
Author: Franklin R. Root
Publisher: John Wiley & Sons
ISBN: 0787945714
Category : Business & Economics
Languages : en
Pages : 292
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Book Description
Sage Advice on Going Global Root's perspective is extremely insightful, and clearly the work of one who knows his topics from personal experience. It encapsulates what some of us have taken decades to learn through trial and error. --Larry D. Bouts, president, International Division, Toys-R-Us, Inc. The North American Free Trade Agreement, the new European common market, and the opening of Eastern Europe--among other recent geopolitical developments--have created unprecedented opportunities for American companies seeking to enter foreign markets. This guide offers executives practical advice, recently updated and expanded, on deciding which markets to enter, choosing a product for international distribution, designing an entry strategy, and developing an effective international marketing plan.
Author: Yakov Amihud
Publisher: Springer Science & Business Media
ISBN: 9780792399759
Category : Business & Economics
Languages : en
Pages : 268
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Book Description
As the financial services industry becomes increasingly international, the more narrowly defined and historically protected national financial markets become less significant. Consequently, financial institutions must achieve a critical size in order to compete. Bank Mergers & Acquisitions analyses the major issues associated with the large wave of bank mergers and acquisitions in the 1990's. While the effects of these changes have been most pronounced in the commercial banking industry, they also have a profound impact on other financial institutions: insurance firms, investment banks, and institutional investors. Bank Mergers & Acquisitions is divided into three major sections: A general and theoretical background to the topic of bank mergers and acquisitions; the effect of bank mergers on efficiency and shareholders' wealth; and regulatory and legal issues associated with mergers of financial institutions. It brings together contributions from leading scholars and high-level practitioners in economics, finance and law.
