Gains from Mergers and Acquisitions Around the World: New Evidence

Using a global M&A data set, this paper provides evidence that the empirical observations relating public acquisitions to, at best, zero abnormal returns, and their stock-financed subset to negative abnormal returns for acquiring firms around the deal announcement are not unanimous across countr...

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Bibliographic Details
Published in:	Financial management 2010-12, Vol.39 (4), p.1671-1695
Main Authors:	Alexandridis, G., Petmezas, D., Travlos, N.G.
Format:	Article
Language:	eng
Subjects:	Acquisitions Acquisitions and mergers Business structures Cash Competition Economic competition Financial economics Financial transactions Market analysis Measurement Mergers Payment methods Shareholders Statistical median Statistical significance Stock returns Stockholders Take-overs Target acquisitions
Online Access:	Get full text
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Summary:	Using a global M&A data set, this paper provides evidence that the empirical observations relating public acquisitions to, at best, zero abnormal returns, and their stock-financed subset to negative abnormal returns for acquiring firms around the deal announcement are not unanimous across countries. Acquirers beyond the most competitive takeover markets (the United States, United Kingdom, and Canada) pay lower premia and realize gains, while share for-share offers are at least non-value-destroying for their shareholders. In contrast, target shareholders within these markets gain significantly less, implying that the benefits generated are more evenly split between the involved parties.
ISSN:	0046-3892 1755-053X