Why Investment Banks Are Not Used in Some Mergers ab 48.99 € als Taschenbuch: Role of Investment Banks Mergers Acquisitions Abnormal Returns. Aus dem Bereich: Bücher, Wissenschaft, Wirtschaftswissenschaft,
This paper investigates on the performance of Mergers and Acquisitions during an economic downturn using a mixed methodology: event study and accounting. It also tries to isolate the determinants of a successful acquisition during those troubled times. We found a positive relation between the amount of deal completed and the value created using event study methodology. Furthermore, deals completed by underperforming companies show superior Abnormal Returns. At last, we found that companies with high EBIT valuation multiples tend to complete more disposals during a downturn.
Seminar paper from the year 2006 in the subject Business economics - Business Management, Corporate Governance, grade: 1,0 -, University of Applied Sciences Kufstein Tirol, course: Mergers & Acquisitions, language: English, abstract: This paper is the final paper for the course 'Mergers & Acquisitions'. Chapter 2 briefly summarizes the most important aspects of the course, like the distinction between mergers and tender offers, reasons for M&A, legal regulations, strategic considerations, history of M&A, defence tactics etc. Chapter 3 deals with the question, whether M&As are value enhancing. Therfore, it looks in some studies and distinguishes between short and long run effects. Chapter 4 describes an example of M&A, nameley Disney's acquisition of Pixar. It will briefly introduce the two companies, deals with the aims and objectives of the acquisition, presents the acquisition sequence and the wealth effects will be calculated, using the method of cumulative abnormal returns (CAR), also called average residuals.
This study examines the short-term and long-term wealth effects of 96 cross-border bank mergers between 1985 and 2005. In the short-term, even after a thorough accounting for information leakage, transactions are found to be wealth-creating, albeit only on a net basis with target gains more than compensating for bidder losses. Contrary to earlier evidence, no abnormal long-term returns are detected, which supports the validity of the inferences drawn from the short-term. Furthermore, a thorough analysis of factors that can explain wealth creation ex-ante suggests that bidder and net wealth creation is higher if bidders take over targets that are already relatively cost efficient ex-ante and do not acquire in «hot» deal markets.
Many extant studies have examined the impact of mergers and acquisitions on firm performance. However, there is little research regarding the role played by investment banks in M&A. This book fills this void. This book not only systematically analyzes the functions of investment banking services for M&A, but also uncovers the abnormal returns to both bidders and targets. The author finds that investment banking services are not necessary under certain circumstances, for either bidder or target firms. In addition, the author finds that target firms more likely use the services from investment banks than the bidders. The wealth gains to target firms are more sensitive to the investment banking choices than the wealth gains to bidders. This book should shed some light on M&A reserach for both researchers and practitioners in M&A field.
Scholars researching in the field of Mergers&Acquisitions use a variety of measures to determine acquisition success - with more than ambiguous results. This thesis adds to this discussion from a practitioner's perspective and generates two main findings: First, findings indicate that accounting-based measures and non-financial criteria are significantly more important than those related to the stock market. This contradicts most academic approaches that favor stock market-related measurement (in most cases using abnormal returns). Second, the thesis identifies companies that have pursued or are currently pursuing an acquisition program, defined as 'the acquisition of several mutually related targets'. Five of these companies are introduced in more detail, as are the characteristics of their respective acquisition program. Results show that acquisition programs have existed for quite a while. Due to their larger relative size, these programs have a more significant potential impact on the company's stock price and, as such, are more carefully watched by analysts and shareholders. Hence, stock market-oriented criteria seem to be more meaningful than for single acquisitions.
This study focused on factors that have positively influenced the model of economic success for commercial and thrift megabanks involved in merger and acquisition activities for the period 1990 - 1997, a period characterized by an unprecedented flurry of merger and acquisition activities among megabanks in the United States. This study identified and measured key independent variables for identifiable mergers and acquisitions among megabanks and tested the extent to which, such independent variables influenced abnormal returns for underlying equities traded in capital markets. This study also tested the hypothesis that megabanks are attracting significantly higher acquisition premiums than the relatively smaller banks. The data collected and the conclusions drawn were based on the logic of a hypothetico-deductive paradigm, which essentially utilized the techniques of the standard event study methodology, and included parameters of the conventional Capital Asset Pricing Model. This study was based on a scientifically determined sample of over 200 banks in the small bank category and between 68 and 86 banks grouped under the megabank category. The findings revealed that megebank acquirers realized negative abnormal returns and that megabank acquirees did not realize economic value significantly greater than acquirers for those banks that integrated on a merger-of-equals basis. The findings also showed that megabanks seemed more willing to pay higher premiums for the right to integrate with other megabanks vis-a-vis the right to integrate with small banks.
The M&A (Mergers and Acquisitions) deal is an important corporate decision nowadays; both the number of global M&A deals and the total transaction value have dramatically increased.This work uses a sample of UK mergers and acquisition from 1985-2004 (inclusive), and shows that relative valuation between acquirers and targets appears to play an important role in explaining companies' acquisition behaviour. This work also uses various methodologies and consistently finds significant negative post-event long-term abnormal returns for acquiring firms and it provides additional empirical evidence regarding pre-bid abnormal returns for both acquiring firms and targets. The analysis should help shed some light on corporate M&A behaviour and its relation with capital market for both academic researchers and corporate financial managers.