Announcement returns during M&A USA 2000-2019: Can they predict the outcome and do managers learn from them?

No Thumbnail Available

URL

Journal Title

Journal ISSN

Volume Title

School of Business | Bachelor's thesis
Electronic archive copy is available locally at the Harald Herlin Learning Centre. The staff of Aalto University has access to the electronic bachelor's theses by logging into Aaltodoc with their personal Aalto user ID. Read more about the availability of the bachelor's theses.

Date

2020

Major/Subject

Mcode

Degree programme

Rahoitus

Language

en

Pages

20 + 3

Series

Abstract

I examine whether the success of M&A can be predicted from the market reaction of the announced deal and do managers learn from the announcement returns from 2000 to 2019 in the USA. I create probit regressions and run them to find out predictability and learning. In the learning part of the study market capitalization is controlled. I find that the combined return of companies does not predict the completion of the merger, but the announcement return of the target does. Furthermore, the managers do not seem to learn from the shareholders’ reaction after the announcement and this is consistent regardless of the market capitalization of the bidder.

Description

Thesis advisor

Ungeheuer, Michael

Keywords

M&A, Announcement return, Learning, Merger, Acquisition

Other note

Citation