The Shortrun Impact Of Acquisitions On Shareholder Value During The Economic Downturn For Acquiring Jse Listed Companies
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The Long Term Impact of Large Acquisitions on the Share Price Performance of Acquiring Companies Listed on the JSE
Author | : Kofi Kyei |
Publisher | : |
Total Pages | : 204 |
Release | : 2008 |
Genre | : Consolidation and merger of companies |
ISBN | : |
The Effect of Mergers and Acquisitions on Long-run Financial Performance of Acquiring Companies
Author | : Dieter Bernhardt Halfar |
Publisher | : |
Total Pages | : |
Release | : 2013 |
Genre | : |
ISBN | : |
Mergers and acquisitions continue to enjoy importance as strategies for achieving growth, although their success in creating shareholder value remains contested. The aim of this research was to evaluate whether, in the long-run, acquiring companies created or destroyed value by evaluating the differences between pre- and post-acquisition firm performance, using, abnormal share price performance, operating financial performance and intrinsic value performance metrics. This research used a non-representative, judgemental sample of 29 JSE listed firms to conclude that, on average, mergers and acquisitions destroy value within two years post-acquisition, although some evidence was found in support of acquiring firm value creation in the third year after the acquisition. Results indicated a significant -6.62% decline in acquiring firm average cumulative average abnormal return (ACAAR) between 504 trading days before and after acquisition announcement dates. This finding reversed in year three, resulting in a positive ACAAR of 8.76%. Similarly, average intrinsic value (AIV) performance indicated that between one year before and one year after the acquisition, AIV deteriorated with a significant -0.131. However, between year one and two after the acquisition, AIV recovered by 0.112. Overall evidence indicated positive and significant AIV growth of 0.370 between one year before and three years after the acquisition. The research found insignificant results for the pre and post-acquisition evaluation of industry-adjusted cash-flow return on all assets (IACRAA).
The Short and Long Term Effects of Large Takeovers on the Share Price Performance of Acquiring Companies Listed on the JSE
Author | : |
Publisher | : |
Total Pages | : 210 |
Release | : 2012 |
Genre | : Consolidation and merger of companies |
ISBN | : |
Impact of Merger and Acquisitions on Stock Returns
Author | : Dr. Amir Rafique |
Publisher | : |
Total Pages | : 32 |
Release | : 2013 |
Genre | : |
ISBN | : |
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.
The Impact of Cross Border Mergers and Acquisitions on the Operating Financial and Short-term Share Price Performance of Acquiring Companies Listed on the Johannesburg Stock Exchange
Author | : Gareth Viljoen |
Publisher | : |
Total Pages | : |
Release | : 2013 |
Genre | : Capital assets pricing model |
ISBN | : |
The Financial Impact of Post-Mergers and Acquisitions: Short-Run Share Price Performance of Acquiring Firms in Hong Kong
Author | : Chun Wing Dorothy Chiu |
Publisher | : |
Total Pages | : 0 |
Release | : 2023 |
Genre | : |
ISBN | : |
This study investigates the financial impact of post-mergers and acquisitions by delving into the short-run stock performance of acquiring firms, if and how deal characteristics affect the (cumulative) announcement abnormal return in a developed financial market- Hong Kong. I hypothesize that (cumulative) abnormal returns of buyers are positive around announcements, deals that belong to industry-irrelated, cash-financed, cross-border, and privately-owned targets would overperform, while large deal values would underperform. From a sample of 60 M&A deals from 2018 to 2022 initiated in Hong Kong, my results show a positive relationship between the share price performance of buyers and post-announcement period. Industry-related deals worsen, mergers and large-value deals benefit the stock performance of acquiring firms, while cash payment, cross-border, and private deals do not play a significant role. This paper contributes to the M&A academia by grasping the recent post-M&A performance in the Asian financial market and detecting a significant alignment between the form of deal and (cumulative) announcement abnormal return.
The Acquisition Value Cycle
Author | : Howard E. Johnson |
Publisher | : |
Total Pages | : 365 |
Release | : 2009 |
Genre | : Consolidation and merger of corporations |
ISBN | : 9780779818891 |
Shareholder Benefits and Firm Performance
Author | : Shavin Malhotra |
Publisher | : |
Total Pages | : 23 |
Release | : 2006 |
Genre | : |
ISBN | : |
Previous research on international mergers and acquisitions has not looked at the valuation consequences of international acquisitions by firms from a developing economy. This study examines the announcement effect and the post-acquisition long-term performance of 96 Indian international acquisitions of U.S. firms made in the period 1999-2005. The study also explores the impact of the Indian acquiring firms' U.S. acquisitions on their underlying operating variables, and risk diversification. We find that while the international acquisition announcements by Indian firms create significant short-term shareholders' wealth, in the long-run international acquisitions have a negative impact on the shareholders' wealth. We also find a significant decrease in the acquiring firms' financial profitability ratios, though there is an evidence of risk-reduction due to global diversification.
Mergers and Productivity
Author | : Steven N. Kaplan |
Publisher | : University of Chicago Press |
Total Pages | : 350 |
Release | : 2007-12-01 |
Genre | : Business & Economics |
ISBN | : 0226424332 |
Mergers and Productivity offers probing analyses of high-profile mergers in a variety of industries. Focusing on specific acquisitions, it illustrates the remarkable range of contingencies involved in any merger attempt. The authors clearly establish each merger's presumed objectives and the potential costs and benefits of the acquisition, and place it within the context of the broader industry. Striking conclusions that emerge from these case studies are that merger and acquisition activities were associated with technological or regulatory shocks, and that a merger's success or failure was dependent upon the acquirer's thorough understanding of the target, its corporate culture, and its workforce and wage structures prior to acquisition. Sifting through a wealth of carefully gathered evidence, these papers capture the richness, the complexity, and the economic intangibles inherent in contemporary merger activity in a way that large-scale studies of mergers cannot.