Evaluation of merger premium and firm performance in Europe
Date published
2015-06-30
Free to read from
Authors
Supervisor/s
Journal Title
Journal ISSN
Volume Title
Publisher
World Academy of Science, Engineering and Technology
Department
Type
Article
ISSN
1756-5154
Format
Citation
Matthias Nnadi and Daniel Aghanya. Evaluation of merger premium and firm performance in Europe. International Journal of Banking, Accounting and Finance, 2018, Volume 9, Issue 2, pp119-140
Abstract
This paper investigates whether the deal premium affects the performance of the acquiring firms in European mergers and acquisitions (M&As) deals for the period 2000-2013. We find a significant reduction in short-term performance of the acquiring firms after the M&As, reflecting the overpayment hypothesis. Our result also indicates that the negative effect on the performance of the acquiring firms is less pronounced in the long-term. The result confirms the synergy hypothesis and the existence of quadratic relationship between high premium and performance. Our findings are robust as we control for firm and time trends. The findings of our study have implications for companies engaging in acquisitions in Europe.
Description
Software Description
Software Language
Github
Keywords
mergers, premiums, performance, acquisition, Europe, returns
DOI
Rights
Attribution-NonCommercial 4.0 International