Stock Market Reactions to Financing and Payment Decisions for European Mergers and Acquisitions
DOI:
https://doi.org/10.29015/cerem.868Słowa kluczowe:
mergers & acquisitions, abnormal returns, financing sources, payment methods, EuropeAbstrakt
Aim: We analyze stock market reactions to merger and acquisition announcements for firms in Europe and contribute to the literature by providing empirical evidence how the decisions with respect to alternative financing sources (equity or debt) and the methods of payment (cash or stock) affect the magnitude of the valuation effects.
Research design: An event study methodology is applied to 717 M&A transactions. We analyze the size of the cumulative abnormal returns using the financing sources and payment methods and other variables as the relevant determinants.
Findings: The cumulative abnormal results suggest that target shareholders and bidder shareholders in private deals benefit from mergers and acquisitions. The effect found is centered around the announcement date, making our findings consistent with market efficiency. Debt financed deals outperform equity financed deals and cash paid M&A outperform stock paid M&As, due to information asymmetry, signaling and agency effects.
Originality: This study adds to our understanding of the relevance of the financing sources and the payment methods for mergers and acquisitions in Europe.
Implications: This study may help practitioners to better assess the valuation effects of alternative financing sources and payment methods when acquiring other firms.
JEL: G32, G34
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Autor przenosi nieodpłatnie na Wyższą Szkołę Bankową we Wrocławiu , bez ograniczeń terytorialnych, majątkowe prawa autorskie do tego utworu w rozumieniu ustawy z dnia 4 lutego 1994 roku o prawie autorskim i prawach pokrewnych ( Dz.U. 1994, Nr 24, poz. 83 ze zm. )na zasadzie wyłączności, tj. prawo do:
a) wyłącznego używania i wykorzystania utworu w dowolnej działalności przez Wyższą Szkołę Bankową we Wrocławiu, w szczególności w działalność Biblioteki Cyfrowej uruchomionej przez Wyższą Szkołę Bankową we Wrocławiu
b) wytwarzania, utrwalania i zwielokrotniania egzemplarzy utworów wszelkimi technikami, w tym techniką drukarską, reprograficzną, zapisu magnetycznego oraz techniką cyfrową, w szczególności ich zwielokrotniania poprzez dokonywanie zapisów na płytach typu CD,
c) zamieszczenia wybranych fragmentów utworu w celach promocyjnych w publikacjach, materiałach promocyjnych, w sieci Internet oraz sieciach wewnętrznych typu Intranet Wyższej Szkoły Bankowej we Wrocławiu,
d) wprowadzania utworu do pamięci komputera Wyższej Szkoły Bankowej we Wrocławiu,
e) kopiowania i powielania utworu w technologiach fotomechanicznych lub innych znanych w dniu zawarcia umowy (fotokopie, kserokopie itp.),
f) przetworzenia dzieła na formę elektroniczną i nieograniczonego rozpowszechniania w sieci Internet.
