Have mergers and acquisitions created value in the online gambling industry?
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School of Business |
Bachelor's thesis
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Author
Date
2020
Department
Major/Subject
Mcode
Degree programme
Tieto- ja palvelujohtaminen
Language
en
Pages
23
Series
Abstract
As the objective of corporate finance states, firm’s management is supposed to maximize the value of the firm and thereby the wealth of the shareholders. A popular practice to create value for the firm has been conducting mergers and acquisitions. A growing industry that has seen a significant amount of M&A activity in recent decades has been the online gambling industry. This paper examines the value creation of mergers and acquisitions in the European online gambling industry using a sample of 70 transactions completed in years 2008-2018. The value creation effect is captured by researching post-deal cumulative abnormal returns of different periods through a long-term event study and by conducting a case study regarding synergy benefits, strategical goals and earn-outs. I find that the sample deals have generated positive cumulative average abnormal returns. However, not all of the results are statistically significant. The most reckoned result of this study is that small deals have generated large and statistically significant positive cumulative average abnormal returns, which has driven the overall value creation of M&A deals in the online gambling industry.Description
Thesis advisor
Vedernikov, AndreiKeywords
mergers and acquisitions, gambling industry, M&A, value creation, event study
