Has the financial crisis changed investor receptions toward M&A announcements? Evidence from the European M&A market
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School of Business |
Bachelor's thesis
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Date
2016
Department
Major/Subject
Mcode
Degree programme
Rahoitus
Language
en
Pages
21
Series
Abstract
This thesis analyzes changes in M&A announcement effects on the acquirer’s stock during and after the climax of the 2008 global financial crisis in the continental Europe M&A market. While existing literature offers varying results on the matter, generally stocks of acquirers have been historically proven to generate significant negative abnormal returns in proximity of the announcement date in Europe. All-cash deals have historically underperformed all-equity financed deals in abnormal return generation and occasionally being negative, but I find evidence that after the latest financial crisis the announcement effects have started to generate positive abnormal returns on all-cash acquisitions. I apply event study methods as well as two parametric and one non-parametric statistical test to analyze the changes in abnormal returns in three mutually exclusive timeframes between 1/2002 and 10/2016.Description
Thesis advisor
Önal, BunyaminKeywords
M&A, announcement effect, financial crisis, event study