Shareholders' Wealth Maximization Effect of Mergers and Acquisitions PDF Download
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Author: Sifiso Ncube
Publisher:
ISBN:
Category : Dissertations, Academic
Languages : en
Pages : 148
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Book Description
Author: Sifiso Ncube
Publisher:
ISBN:
Category : Dissertations, Academic
Languages : en
Pages : 148
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Book Description
Author: Deborah Gugler
Publisher:
ISBN:
Category : Bank mergers
Languages : en
Pages : 20
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Book Description
Author: Sonia J. Vicars
Publisher:
ISBN:
Category : Consolidation and merger of corporations
Languages : en
Pages : 68
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Author: Neelam Rani
Publisher:
ISBN:
Category :
Languages : en
Pages :
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This paper examines the share price performance of domestic mergers and acquisitions in India during the period 2003-2008. The focus of the paper is on the shareholders of acquiring firms. The present work performs a disaggregated analysis for sub-samples based on the status of the target firm acquired. The sample is divided into two categories: (i) acquisition of target firm to be totally absorbed with the acquiring firm (ii) target firm remains as subsidiary (51-100%). The study further investigates the effect of method of financing (cash or stock) employed in the acquisition and the form of the target firm (listed or unlisted) acquired on the stock returns of the acquiring companies' shareholders. The results indicate that acquisitions generate 1.60% (statistically significant) cumulative average abnormal returns (CAAR) during the event window of 5 days (-2, 2) for the entire sample. The major finding of disaggregated analysis is that when target remains as a domestic subsidiary, the acquirer earns 2.82% CAAR (statistically significant) over pre-event window of 19 days (-20, -2). In contrast, the acquirer shareholder loses 0.41% CAAR when the target firm is absorbed with the acquiring firm during the same period. The acquisitions financed with cash generate positive abnormal returns. The positive abnormal returns are not observed in the case of acquisitions financed with stock. The acquirer of unlisted domestic target firms experience higher return than the acquirers of listed domestic target firms. However, the acquirers experience (statistically significant) negative abnormal returns for the post-event window of 19 days (2, 20) in all acquisitions.
Author: Gordon Roy Kerr
Publisher:
ISBN:
Category : Bank mergers
Languages : en
Pages : 192
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Author: Kotaro Inoue
Publisher:
ISBN:
Category :
Languages : en
Pages : 50
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This study examines wealth effects of mergers and acquisitions in developing mergers and acquisitions market by using data of both domestic and cross-border acquisitions by Japanese firms. Although Japan had the second largest GDP in the world during the analyzed period, active market for corporate control in Japan started recently. The results indicate that M&A by Japanese firms enhance shareholder wealth. We also show that larger synergy realized in horizontal acquisitions with full control of target firms. Existence of outside directors and monitoring by shareholders contribute the post-acquisition performance. We provide evidence that acquisitions by Japanese firms play similar role as those in the US and the UK.
Author: Dorothee J. Feils
Publisher:
ISBN:
Category : Consolidation and merger of corporations
Languages : en
Pages : 352
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Author: Muneeb Lashari
Publisher:
ISBN:
Category :
Languages : en
Pages : 16
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The purpose of this research is to examine Merger and acquisition impact on Size, Profitability, Shareholders wealth, Market share and Segments in USA Technology companies. The research is conducted on 100 companies listed under Technology sector at NASDAQ which covered the period of 2010-2014, total observations of 100 firms-years. The dependent variables are Size, Profitability, Shareholders wealth, Market share and Segments and independent variables is Pre and Post Merger and Acquisition. The research employed Descriptive Pearson correlation coefficient and Paired T-Test and the findings shows only dividends and products to be positively correlated while all other variables found to be insignificant relation with merger and acquisition activity.
Author: Ka Chung Chow
Publisher:
ISBN:
Category :
Languages : en
Pages :
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In this dissertation, I examine two related questions on whether and how tax aggressiveness of firms is associated with shareholder wealth in a new context - mergers and acquisitions (M&A). The first study investigates whether and how the tax aggressiveness of the acquirers and targets affects shareholder wealth. I present the idea of tax aggressiveness transfer whereby the acquirer's propensity for tax planning applies to its target's tax function after the change in ownership. I measure the degree of tax aggressiveness transfer using the relative tax aggressiveness of the acquirer and target (i.e., the difference in tax aggressiveness between the two firms). I find that acquisitions of more tax aggressive targets by less tax aggressive acquirers generate significantly lower acquisition gains. I also document weaker evidence that acquisitions of less tax aggressive targets by more tax aggressive acquirers generate higher acquisition gains. That is, the results suggest that the shareholder wealth effects of tax aggressiveness transfer are driven by the value-destroying effect of decreases in tax aggressiveness. Cross-sectional analyses reveal that the acquirer's governance is a significant determinant of the shareholder wealth effects of tax aggressiveness transfer. Specifically, the results indicate that, when acquirers are well-governed, acquisitions of targets with lower tax aggressiveness by acquirers with higher tax aggressiveness are value-enhancing. Similarly, acquisitions of targets with higher tax aggressiveness by acquirers with lower tax aggressiveness are value-destroying. These findings are robust to various measures of tax aggressiveness. In sum, I find that tax aggressiveness transfer is a significant determinant of value creation or destruction in M&A. The second study is devoted to studying whether and how the target's participation of tax shelters - an extreme form of tax aggressiveness - matters in acquirer's valuation of the target firm. Using a novel dataset that identifies targets' non-participation in tax shelters, I find that the target's non-sheltering status is associated with a higher takeover premium, indicating that acquirers reward targets for not engaging in tax sheltering. This positive association is stronger for targets that are more opaque and for acquirers that are less tax aggressive. In addition, I find that the target's non-sheltering status is positively associated with acquirer returns for acquirers that are weakly governed and for targets that are more opaque. Overall, my findings suggest that the target's non-sheltering status is relevant in acquirers' valuation of the target, and that the valuation benefits of the target's non-participation in tax shelters are mainly accrued to the target's own shareholders rather than to those of the acquiring firm.
Author: Florian Beyer
Publisher: GRIN Verlag
ISBN: 3346145492
Category : Business & Economics
Languages : en
Pages : 24
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Book Description
Seminar paper from the year 2017 in the subject Business economics - Investment and Finance, grade: 1,7, The FOM University of Applied Sciences, Hamburg, language: English, abstract: This paper will examine the question of how M&A activities influence a company’s stock price and earnings per share (EPS), especially if the bootstrap effect occurs? In 2016, the global mergers and acquisitions (M&A) activities decreased by about 18 percent compared to 2015. Altogether, 17,369 deals with a value of 3.2 trillion (tn.) US-Dollars (USD) were performed. There are numerous reasons to invest and divest in inorganic growth. Organic growth has its limitations, thus acquiring competitors, growing vertically or horizontally as well as accessing new markets are strong motivators to do so. Growing a business is often linked with going public. The decision to be part of the stock market and to perform M&A influences an enterprise’s value for various reasons. To approach these questions, the first chapter gives a general overview of reasons, motivators, risks and benefits of M&A. Thereafter, the influence of M&A on a company’s shareholder value and EPS is examined. Then, the bootstrap effect is explained and subsequently illustrated by an exemplary M&A transaction. Afterwards the risks and benefits of bootstrapping and M&A are analysed to consider its usefulness and influence on the share price and EPS.
