A Study of the Impact of Mergers and Acquisitions on Shareholder Wealth of Acquiring Firms in the Short Run: the UK Evidence.
This paper investigates the impact of M&A on shareholder wealth of acquiring firms in the short run. Testing on the sample of 909 M&A deals made by UK public acquiring firms between 1997 and 2006, the results reveals that on average, acquiring firms earn significant and positive abnormal ret...
| Main Author: | |
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| Format: | Dissertation (University of Nottingham only) |
| Language: | English |
| Published: |
2015
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| Online Access: | https://eprints.nottingham.ac.uk/30109/ |
| _version_ | 1848793922312077312 |
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| author | Sun, Yingrong |
| author_facet | Sun, Yingrong |
| author_sort | Sun, Yingrong |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | This paper investigates the impact of M&A on shareholder wealth of acquiring firms in the short run. Testing on the sample of 909 M&A deals made by UK public acquiring firms between 1997 and 2006, the results reveals that on average, acquiring firms earn significant and positive abnormal returns in both two event windows (-1, +1) and (-2, +2). This proves that shareholders of acquiring firms achieve a significant gain in wealth around the announcement day of M&A. In addition, the wealth effects of six bid and firm characteristics are examined. The evidence shows that around the announcement day of M&A, acquiring firms which have small size, or purchase private targets, or make takeovers with larger relative size can achieve a significantly higher abnormal returns. In addition, cash payment positively influences acquirers’ abnormal returns in the event window (-2, +2). However, such influence is insignificant. Tobin’s q has a significant and negative effect on acquirers’ abnormal returns in the event window (-2, +2). Finally, the impact of relatedness of acquisition is insignificant, but the magnitude of the impact is inconclusive. |
| first_indexed | 2025-11-14T19:07:59Z |
| format | Dissertation (University of Nottingham only) |
| id | nottingham-30109 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T19:07:59Z |
| publishDate | 2015 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-301092017-10-19T14:57:09Z https://eprints.nottingham.ac.uk/30109/ A Study of the Impact of Mergers and Acquisitions on Shareholder Wealth of Acquiring Firms in the Short Run: the UK Evidence. Sun, Yingrong This paper investigates the impact of M&A on shareholder wealth of acquiring firms in the short run. Testing on the sample of 909 M&A deals made by UK public acquiring firms between 1997 and 2006, the results reveals that on average, acquiring firms earn significant and positive abnormal returns in both two event windows (-1, +1) and (-2, +2). This proves that shareholders of acquiring firms achieve a significant gain in wealth around the announcement day of M&A. In addition, the wealth effects of six bid and firm characteristics are examined. The evidence shows that around the announcement day of M&A, acquiring firms which have small size, or purchase private targets, or make takeovers with larger relative size can achieve a significantly higher abnormal returns. In addition, cash payment positively influences acquirers’ abnormal returns in the event window (-2, +2). However, such influence is insignificant. Tobin’s q has a significant and negative effect on acquirers’ abnormal returns in the event window (-2, +2). Finally, the impact of relatedness of acquisition is insignificant, but the magnitude of the impact is inconclusive. 2015-09-17 Dissertation (University of Nottingham only) NonPeerReviewed application/pdf en https://eprints.nottingham.ac.uk/30109/1/Yingrong%20Sun_4227415.pdf Sun, Yingrong (2015) A Study of the Impact of Mergers and Acquisitions on Shareholder Wealth of Acquiring Firms in the Short Run: the UK Evidence. [Dissertation (University of Nottingham only)] |
| spellingShingle | Sun, Yingrong A Study of the Impact of Mergers and Acquisitions on Shareholder Wealth of Acquiring Firms in the Short Run: the UK Evidence. |
| title | A Study of the Impact of Mergers and Acquisitions on Shareholder Wealth of Acquiring Firms in the Short Run: the UK Evidence. |
| title_full | A Study of the Impact of Mergers and Acquisitions on Shareholder Wealth of Acquiring Firms in the Short Run: the UK Evidence. |
| title_fullStr | A Study of the Impact of Mergers and Acquisitions on Shareholder Wealth of Acquiring Firms in the Short Run: the UK Evidence. |
| title_full_unstemmed | A Study of the Impact of Mergers and Acquisitions on Shareholder Wealth of Acquiring Firms in the Short Run: the UK Evidence. |
| title_short | A Study of the Impact of Mergers and Acquisitions on Shareholder Wealth of Acquiring Firms in the Short Run: the UK Evidence. |
| title_sort | study of the impact of mergers and acquisitions on shareholder wealth of acquiring firms in the short run: the uk evidence. |
| url | https://eprints.nottingham.ac.uk/30109/ |