Announcement returns during M&A USA 2000-2019: Can they predict the outcome and do managers learn from them?
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School of Business |
Bachelor's thesis
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Authors
Date
2020
Department
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, MichaelKeywords
M&A, Announcement return, Learning, Merger, Acquisition