Title: Value creation in mergers and acquisitions: A study of european transactions during the fifth wave
Authors: Huyghebaert, Nancy ×
Luypaert, Mathieu #
Issue Date: May-2009
Series Title: Tijdschrift voor Bank- en Financiewezen vol:5 pages:308-316
Abstract: This paper empirically investigates shareholder wealth effects surrounding the announcement of mergers and acquisitions between listed companies in the European Union during 1997-2006.
The results show that target investors earn a statistically significant positive abnormal return of 16.82% during the event window from 50 days before until 50 days after the announcement date, while bidder shareholders on average realize an insignificant 0.16%. The ensuing combined shareholder wealth effect equals 2.40% and is significantly different from zero. We also show that the correlation between target and bidder CARs is significantly negative in Continental Europe. We further find that all-cash offers result in significantly lower bidder abnormal returns. Target investors gain more in cross-border than in domestic M&As. Finally, target abnormal returns are significantly higher in UK transactions,while M&A shareholder value effects seem to be larger for Continental European bidders.
ISSN: 0772-778X
Publication status: published
KU Leuven publication type: AT
Appears in Collections:Research Center Finance, Leuven
× corresponding author
# (joint) last author

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