Short-term performance, industry effects, and motives: evidence from large M&As.(mergers and acquisitions ): An article from: Quarterly Journal of Finance and Accounting
Book Details
Author(s)Halil Kiymaz, H. Kent Baker
PublisherUniversity of Nebraska-Lincoln
ISBN / ASINB001KWJECM
ISBN-13978B001KWJEC1
MarketplaceFrance 🇫🇷
Description
This digital document is an article from Quarterly Journal of Finance and Accounting, published by University of Nebraska-Lincoln on March 22, 2008. The length of the article is 13469 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.
From the author: We investigate the short-term market response associated with the announcement of large domestic mergers and acquisitions (M&As) involving public U.S. firms with public targets from 1989 to 2003. We partition the results by industry type, identify the underlying motives for acquiring firms engaging in M&As, and examine potential determinants of abnormal performance. Overall, abnormal returns are significantly negative for acquirers but significantly positive for targets. The wealth effects to acquirers range from significantly positive to significantly negative depending on the industry. Targets earn positive short-run abnormal returns across industries. We find that synergy is the main motive for M&As, but some support exists for hubris. Determinants of acquirers' returns include the level of financial slack, P/E, relative industry P/E, and being in a heavily regulated industry. For targets, variables influencing their abnormal returns include relative size and whether they are in an industry related to the acquirer.
Citation Details
Title: Short-term performance, industry effects, and motives: evidence from large M&As.(mergers and acquisitions )
Author: Halil Kiymaz
Publication:Quarterly Journal of Finance and Accounting (Magazine/Journal)
Date: March 22, 2008
Publisher: University of Nebraska-Lincoln
Volume: 47 Issue: 2 Page: 17(28)
Distributed by Gale, a part of Cengage Learning
From the author: We investigate the short-term market response associated with the announcement of large domestic mergers and acquisitions (M&As) involving public U.S. firms with public targets from 1989 to 2003. We partition the results by industry type, identify the underlying motives for acquiring firms engaging in M&As, and examine potential determinants of abnormal performance. Overall, abnormal returns are significantly negative for acquirers but significantly positive for targets. The wealth effects to acquirers range from significantly positive to significantly negative depending on the industry. Targets earn positive short-run abnormal returns across industries. We find that synergy is the main motive for M&As, but some support exists for hubris. Determinants of acquirers' returns include the level of financial slack, P/E, relative industry P/E, and being in a heavily regulated industry. For targets, variables influencing their abnormal returns include relative size and whether they are in an industry related to the acquirer.
Citation Details
Title: Short-term performance, industry effects, and motives: evidence from large M&As.(mergers and acquisitions )
Author: Halil Kiymaz
Publication:Quarterly Journal of Finance and Accounting (Magazine/Journal)
Date: March 22, 2008
Publisher: University of Nebraska-Lincoln
Volume: 47 Issue: 2 Page: 17(28)
Distributed by Gale, a part of Cengage Learning
