Economic Policy Uncertainty, Effect on M&As, Evidence from the UK Market

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School of Business | Bachelor's thesis
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Date
2024
Major/Subject
Mcode
Degree programme
Rahoitus
Language
en
Pages
23
Series
Abstract
This bachelor's thesis investigates the impact of economic policy uncertainty (EPU) on mergers and acquisitions (M&As) within the UK market. The sample for the study consists of 5255 M&A deals spanning the period from 2000 to 2022. This study builds on the foundations of existing literature in the field and offers a fresh view on how the M&A market reacts to high uncertainty by comparing data from stable and unstable periods. The results from the quantitative study suggest a 7,7 % drop in the number of monthly deals and 18,5 % drop in monthly aggregate deal value, in response to a one standard deviation increase in EPU. Additionally, the study displays evidence of a weakened relationship between EPU and M&As, during an extended period of high policy uncertainty.
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Thesis advisor
Luotonen, Niilo
Keywords
economic policy uncertainty, mergers and acquisitions, UK, M&A, EPU
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