Firm Size, M&A Announcement Returns and the Financial Crisis
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School of Business |
Bachelor's thesis
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Authors
Date
2019
Department
Major/Subject
Mcode
Degree programme
Rahoitus
Language
en
Pages
27
Series
Abstract
Prior academic literature has found evidence that there is a significant difference in the announcement returns between small and large acquirers. I examine a sample of 24,870 U.S.-based acquisitions between 1980 and 2017. The sample consists of transactions where a public company acquires the entire share capital of a private or public U.S. company. The equally-weighted abnormal announcement return for acquiring companies is 1.5%. The announcement return for the shareholders of large acquirers is almost three percentage points lower than the return for small acquirers. These results support the previous findings obtained by Moeller, Schlingemann, and Stulz (2004) and are robust to deal and firm characteristics. Small acquirers exceed the performance of large acquirers over the sample period; however, large acquirers seem to perform relatively better during the financial crisis.Description
Thesis advisor
Joenväärä, JuhaKeywords
Acquisitions, Size effect, Financial crisis, Event study