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The Long Run Performance Of Acquiring Firms
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Book Synopsis The Long Run Performance of Acquiring Firms by : Omar Ziad Mashaka
Download or read book The Long Run Performance of Acquiring Firms written by Omar Ziad Mashaka and published by . This book was released on 2008 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines a sample of 204 acquisitions completed between 1990 and 2003 where the acquiring and target firms are both publicly traded in the U.S. marke t. Acquirers are grouped based on their levels of corporate governance and free cash flow. In agreement with previous literature, the study's results indicate t hat the long run performance of high free cash flow acquirers is worse than that of low free cash flow acquirers. There was no significant difference between th e performances of high and low corporate governance acquirers. Acquirers with hi gh free cash flow and low corporate governance displayed the worst performance, while those with low free cash flow and high corporate governance had the best p erformance. This difference is mainly attributed to the difference in free cash flow rather than corporate governance. The agency theory of free cash flow was f ound to better explain the long run performance of acquirers than the level of c orporate governance.
Book Synopsis The Long-run Post-acquisition Performance of Acquiring Firms by : Damien G. Blake
Download or read book The Long-run Post-acquisition Performance of Acquiring Firms written by Damien G. Blake and published by . This book was released on 2002 with total page 142 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Does Corporate Performance Improve After Mergers? by : Paul M Healy
Download or read book Does Corporate Performance Improve After Mergers? written by Paul M Healy and published by Legare Street Press. This book was released on 2023-07-18 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book examines the phenomenon of corporate mergers and the impact they have on performance. Drawing on extensive research and case studies, the authors explore the conditions under which mergers are most likely to succeed and offer guidance to managers looking to pursue a merger strategy. This work has been selected by scholars as being culturally important, and is part of the knowledge base of civilization as we know it. This work is in the "public domain in the United States of America, and possibly other nations. Within the United States, you may freely copy and distribute this work, as no entity (individual or corporate) has a copyright on the body of the work. Scholars believe, and we concur, that this work is important enough to be preserved, reproduced, and made generally available to the public. We appreciate your support of the preservation process, and thank you for being an important part of keeping this knowledge alive and relevant.
Book Synopsis The Long Term Performance of Acquiring Firms by : Shantanu Dutta
Download or read book The Long Term Performance of Acquiring Firms written by Shantanu Dutta and published by . This book was released on 2007 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we investigate the long-term stock return performance of Canadian acquiring firms in the post event period by using 1300 Mamp;A events between 1993-2002 period. We use both event-time and calendar-time approach and conduct robustness tests for benchmarks, methodological choices, statistical techniques and other related factors such as payment methods. We also assess the role of governance variables. Contrary to stylized facts reported in the U.S. studies, we do not find negative abnormal long-term abnormal returns for the acquirer following an acquisition event.
Book Synopsis Mergers and Acquisitions by : Neelam Rani
Download or read book Mergers and Acquisitions written by Neelam Rani and published by Springer. This book was released on 2016-09-15 with total page 277 pages. Available in PDF, EPUB and Kindle. Book excerpt: The book examines the market reaction to mergers and acquisitions (M&A) announcements over a period from 2003 to 2015. Mergers and acquisitions continue to be amongst the preferred competitive options available to the companies seeking to grow fast in the rapidly changing global business scenario. M&A as a growth strategy has received attention from developed as well as emerging economies. It has been extensively used by managers as an expansion strategy and also serves as an important instrument for increasing corporate efficiency. Recently, M&A has grown at a rapid pace, creating a need for research to analyze what drives this phenomenon and how it affects firms and markets. As such, this book evaluates the impact of M&A on short-term abnormal returns as well long-term financial performance. It also assesses the management view concerning the motives for undertaking M&A. In addition, the book investigates the corporate governance practices of the acquiring firms and their impact on the short- term as well as long- term performance of those firms.
Book Synopsis The Effect of Mergers and Acquisitions on Long-run Financial Performance of Acquiring Companies by : Dieter Bernhardt Halfar
Download or read book The Effect of Mergers and Acquisitions on Long-run Financial Performance of Acquiring Companies written by Dieter Bernhardt Halfar and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: 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).
Book Synopsis Acquiring Firm Long-term Performance and Governance Characteristics by : Jonathan Paul Breazeale
Download or read book Acquiring Firm Long-term Performance and Governance Characteristics written by Jonathan Paul Breazeale and published by . This book was released on 2004 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: I examine the market reaction to merger announcements and the long-term post-merger stock price performance of newly merged firms. For a sample of 484 acquiring firms completing mergers between 1993 and 2000, the average value-weighted abnormal announcement date return (market-adjusted) is a statistically significant -1.02%. On average, this reaction is more negative for firms with "good governance." Specifically, a governance index comprised of three governance variables is significantly negative in a multivariate regression of announcement date abnormal returns. Comp is the percentage of CEO salary consisting of equity incentives (including stock options and restricted stock grants), InsideOwn is the percentage of the firm owned by officers and directors, and InstOwn is the percentage of the firm owned by large outside block shareholders. Value-weighted calendar-time portfolios consisting of the full sample of acquirers exhibit significant abnormal returns of 9.12%, 33.84% and 55.8% for the 12, 36 and 60 months following the merger, respectively. This overperformance is limited to the value-weighted portfolios. There is calendar-time evidence of abnormal performance for some subsamples on a risk adjusted basis. However, when compared to a control group, abnormal performance is limited to large glamour acquirers on a 12-month horizon, large cash acquirers on a 36 and 60-month horizon, and small focusing acquirers on a 60-month horizon. Multivariate analysis of long-run returns reveals that use of equity and corporate diversification are associated with lower post-merger performance. With regard to governance and long-run stock returns, there is also evidence that suggests higher levels of incentive compensation for CEOs is associated with more successful merger transactions for long-term investors.
Author :John J. Schmitz Publisher :London, Ont. : Western Business School, University of Western Ontario ISBN 13 :9780771415654 Total Pages :29 pages Book Rating :4.4/5 (156 download)
Book Synopsis The Long Term Pre and Post-merger Performance of Acquiring Firms : Some Canadian Evidence by : John J. Schmitz
Download or read book The Long Term Pre and Post-merger Performance of Acquiring Firms : Some Canadian Evidence written by John J. Schmitz and published by London, Ont. : Western Business School, University of Western Ontario. This book was released on 1993 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Long-term Abnormal Operating Performance of Acquiring Firms After Mergers and Acquisitions by : Ling Cai
Download or read book Long-term Abnormal Operating Performance of Acquiring Firms After Mergers and Acquisitions written by Ling Cai and published by . This book was released on 2001 with total page 242 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Handbook of Corporate Finance by : Bjørn Espen Eckbo
Download or read book Handbook of Corporate Finance written by Bjørn Espen Eckbo and published by Elsevier. This book was released on 2007-05-21 with total page 559 pages. Available in PDF, EPUB and Kindle. Book excerpt: Judging by the sheer number of papers reviewed in this Handbook, the empirical analysis of firms’ financing and investment decisions—empirical corporate finance—has become a dominant field in financial economics. The growing interest in everything “corporate is fueled by a healthy combination of fundamental theoretical developments and recent widespread access to large transactional data bases. A less scientific—but nevertheless important—source of inspiration is a growing awareness of the important social implications of corporate behavior and governance. This Handbook takes stock of the main empirical findings to date across an unprecedented spectrum of corporate finance issues, ranging from econometric methodology, to raising capital and capital structure choice, and to managerial incentives and corporate investment behavior. The surveys are written by leading empirical researchers that remain active in their respective areas of interest. With few exceptions, the writing style makes the chapters accessible to industry practitioners. For doctoral students and seasoned academics, the surveys offer dense roadmaps into the empirical research landscape and provide suggestions for future work. *The Handbooks in Finance series offers a broad group of outstanding volumes in various areas of finance *Each individual volume in the series should present an accurate self-contained survey of a sub-field of finance *The series is international in scope with contributions from field leaders the world over
Book Synopsis Knights, Raiders, and Targets by : John C. Coffee
Download or read book Knights, Raiders, and Targets written by John C. Coffee and published by Oxford University Press. This book was released on 1988 with total page 562 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis The Financial Impact of Post-Mergers and Acquisitions: Short-Run Share Price Performance of Acquiring Firms in Hong Kong by : Chun Wing Dorothy Chiu
Download or read book The Financial Impact of Post-Mergers and Acquisitions: Short-Run Share Price Performance of Acquiring Firms in Hong Kong written by Chun Wing Dorothy Chiu and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Book Synopsis Managerial Expectations and the Performance of Acquiring Firms by : Jim Cicon
Download or read book Managerial Expectations and the Performance of Acquiring Firms written by Jim Cicon and published by . This book was released on 2015 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines whether the “soft” information present in merger and acquisition announcement press releases contains incrementally valuable news relative to traditional “hard” data and analyst generated information. We use Diction, a textual-analysis program, to construct measures of optimism and synergy expectations for more that 1,400 mergers and acquisition announcements over the period 1995 to 2007. We find that our measure of synergy expectations is inversely related to acquirer announcement period returns and continues to be negatively related to long-term performance up to two years post merger. We find that managerial optimism is not valued by the market and is especially discounted when analysts hold contrary views regarding the attractiveness of a merger. Overall, we conclude that the soft data contained in M&A announcements provides meaningful information to investors.
Book Synopsis The Effect of Mergers and Acquisitions on Long-run Financial Performance of Acquiring Companies by : Dieter B. Halfar
Download or read book The Effect of Mergers and Acquisitions on Long-run Financial Performance of Acquiring Companies written by Dieter B. Halfar and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis The Long-Run Performance of Mergers and Acquisitions by : Meenakshi Sinha
Download or read book The Long-Run Performance of Mergers and Acquisitions written by Meenakshi Sinha and published by . This book was released on 2004 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: A number of studies have found that on an average, mergers underperform in the long-run. More interestingly, studies have found substantial cross-sectional differences in the performance of the mergers in the long-run, and suggested that these differences reflect market inefficiency with respect to acquirer misvaluation at the time of the announcement. Proponents of market efficiency have criticized these findings on methodological grounds and for inappropriate adjustment for risk factors. In this study, we address the risk vs. mispricing debate with respect to the cross-section of long-run abnormal returns in mergers. We compute ex-ante misvaluation ratios for acquiring firms and find that (1) the misvaluation proxies strongly predict the cross-section of post-acquisition abnormal returns of the merged firms (2) this return predictability is concentrated around future quarterly earnings announcements, consistent with the mispricing explanation (3) bonds of more overvalued acquirers receive more net ratings downgrades following the acquisition, which suggests that these acquirers are not less risky, and (4) more overvalued acquirers do not have superior operating performance post-acquisition, suggesting that the misvaluation ratios do not proxy for quot;anticipated synergiesquot;. Overall, these results support the view that the cross-sectional differences in the long-run abnormal performance of acquirers is a reflection of market inefficiency and not a result of unadjusted risk factors.
Book Synopsis The Impact of Merger and Acquisition Activities on Corporate Performance Measured on an Accounting and Market Base by : Malwina Woznik
Download or read book The Impact of Merger and Acquisition Activities on Corporate Performance Measured on an Accounting and Market Base written by Malwina Woznik and published by GRIN Verlag. This book was released on 2013-08-07 with total page 115 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2013 in the subject Business economics - Controlling, grade: 1,3, University of Cologne (Seminar für allgemeine BWL und Controlling), language: English, abstract: “Warren Buffett swallows Heinz: Sauce for the sage” – a typical takeover announcement was published lately on 14th February 2013. Warren Buffett, a well known inves tor, acquired along with the financial investor 3G Capital the H. J. Heinz Company for $ 28 billion. This is likely to become the largest transaction in the food industry. The company's stock price rose more than 20.0 percent after the publication which is a very characteristic reaction to deal announcements. Hence, the important question is, if transactions, such as the takeover of the H. J. Heinz Company, affect the corporate performance consistently. In general, the core idea about mergers and acquisitions (M&A) is to generate additional future growth if for example organic growth is limited. If two companies merge or a target is bought by another company (the acquirer), shareholders believe in synergy effects. These are revenue enhancements, cost reductions, tax gains and reduced capital requirements leading to business growth and thus to a higher value of the new company. However, it is questionable if this theory can also be experienced in the real world. Ever since the effects of M&A have been analysed, the market of the United States (US) was used as data source. This is plausible due to the fact that the very first information was well recorded for US companies. It is remarkable that literature contributes very little research on Europe, although the number of announced European transactions is comparable to those of the US. For example, in 2007 the European deals volume overtook the one from the United States of America (USA) for the first time. Moreover, research on single European countries almost never exists or only rarely. One exception is the United Kingdom (UK) with an early takeover history beginning in the 1960s. However, European countries should be analysed separately because of its high diversity regarding the accounting framework, the corporate governance or the legal and regulation structure. For instance, Germany is characterised by conservative accounting principles and a high regulation by the banking sector. These issues may also influence the M&A decision making process.
Book Synopsis The Long-Horizon Performance of Acquiring Firms by : Barbara S. Petitt
Download or read book The Long-Horizon Performance of Acquiring Firms written by Barbara S. Petitt and published by . This book was released on 2001 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: The purpose of this paper is to report the evidence of the long-horizon abnormal returns of 80 French acquiring firms, involved in a tender offer between 1977 and 1993. We find four results: (1) tender offers lead to a wealth-destruction for French acquiring firms, which experience a mean abnormal return of -25.41% over a long-horizon window of 39 months; (2) over the pre-acquisition window, the mean abnormal return (0.32%) is not significant, but we observe an opposition between the pre-winners (12.33%) and the pre-losers (-9.02%); (3) over the post-acquisition window, the mean abnormal return is negative (-24.22%) and significant at the 1% level, but the wealth-destruction is greater for the pre-losers (-35.03%) than for the pre-winners (-10.31%); (4) in 70% of the cases, the market is capable of anticipating whether a tender offer leads to a wealth-creation or a wealth-destruction, but it fails to quantify the extent of the wealth-variation.
