The Impact of Acquirer Size on M&A Announcement Returns and the Effect of Crisis Periods

Thumbnail Image

Files

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.
Unless otherwise stated, all rights belong to the author. You may download, display and print this publication for Your own personal use. Commercial use is prohibited.

Authors

Date

2024

Department

Rahoituksen laitos

Major/Subject

Mcode

Degree programme

Rahoitus

Language

en

Pages

39

Series

Abstract

This thesis explores the impact of acquirer size on M&A announcement returns in Western Europe. It shows whether the previously observed negative relationship between firm size and announcement return exists in Western European markets. Furthermore, the study examines how crisis periods affect announcement returns and whether the size effect inverses. I’ll also give insights on regional differences in announcement returns. My sample comprises 1,559 intra-Western European acquisitions between 2000 and 2023 by public companies listed in Western European stock exchanges, and I find an abnormal announcement return of 2.62%. In addition, I find small acquirers outperforming large acquirers by 2.82 percentage points, supporting the size effect. The results are robust to firm and deal characteristics, a form of payment, beta assumptions, supplementary event windows, supplementary market index, and the organizational structure of the acquired assets. The study finds differing outcomes relative to the impact of the 2008 financial crisis and the Covid-19. However, the study doesn’t yield definitive conclusions on the impact of crisis periods on announcement returns nor the presence of a reversed size effect.

Description

Thesis advisor

Jylhä, Petri

Keywords

acquisitions, announcement returns, firm size, crisis periods

Other note

Citation

Permanent link to this item

https://urn.fi/URN:NBN:fi:aalto-202501261757

Collections

[kand] Kauppakorkeakoulu / BIZ