The evolution of M&A : does it create value?

• Autor(a) principal: Palminha, Francisco José Pires
• Data de Publicação: 2018
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.14/25495
• topic: M&A; Mergers and acquisitions; Event studies; CAR; Cumulative abnormal returns; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

Scholars defend that target firms are the winners when it comes to the analysis of the shortterm gains of Mergers and Acquisitions and acquirers usually present negative or nonsignificant abnormal returns around the event date. However, these conclusions are argued among the finance community with arguments such as the fact that the Event Study analysis not being a good analysis to understand the gains for the acquirers that these profit on the long term, and that the markets cannot reflect these potential synergies on the short term. We then do a general analysis of the occurrence of the M&A deals taking place between 2000-2017 in an attempt to draw some conclusions regarding the tendencies. We also run an event study analysis to obtain the Cumulative Abnormal Returns (CARs) for targets and acquirers, with our conclusions being very similar to those found in previous analyses, however we went deeper to understand how these CARs diverge from industry to industry (obtained from the companies SIC codes) as well as from deals done between acquirers and targets from the same Industry or from different industries. Lastly we run some regressions to understand the average CARs for the -15/15 days before and after the announcement, excluding the companies’ specific effects, in this last analysis we obtained interesting results that showed that during the financial crisis the average for the targets is smaller when compared to the figures before and after the crisis; for the acquirers the average found was positive arguing in favor of the thesis that the acquirer firms are able to explore the crisis period to have positive CARs when acquiring potentially fragilized targets.