Determining the relation between the mergers and acquisitions of firms with the announced total value : a bi-variate generalized Poisson regression approach

Quarterly Review of Economics and Finance, 2010

Review of Financial Economics, 1992

Managerial Finance, 2019

Purpose The purpose of this paper is to investigate the impact of mergers and acquisitions (M&As) on acquiring company systematic risk using a global sample of 34,221 completed deals that occurred between the years 1977 and 2012, covering 163 countries and 85 industries. Design/methodology/approach Acquirers’ systematic risk (beta) is calculated using the capital asset pricing model. The change in acquirers’ beta post-merger is obtained using event study and tested for mean differences across various sub-categories of deals. Cross-sectional regressions are then performed to test several hypotheses relating to the impact of diversification, method of payment, target status and prior experience on acquirers’ risk. Findings For the overall sample, the evidence suggests that acquirers’ beta tends to increase post-merger, but only in cases where their pre-merger risk is relatively low in relation to the risk of the market. The authors also show that cash payment deals for publicly listed...

2013

International Journal of Accounting and Financial Reporting, 2014

From the last few decades, maximum studies focused to understand the importance of going into the deal of Mergers & Acquisitions (M&A). The current study examined the motivation to recognize either the assumed benefits of the deal of Mergers and Acquisitions have posted increase or not. The current study calculated whether the deal is beneficial or harmful for the organizations who want to enter into the deal of M&A. The study scrutinizes the issues by using the perspective of history, waves, motives and methods to determine Merger and acquisition value. The study focuses on the current Literature available on M&A from the recent past to portray unlike the methods used to gauge performance of M&A. Although field of M&A research is far too broad and more complex to be covered in a review paper, therefore, the study attempts to start covering some historical and background issues such as History, waves in M&A, Methods of measuring deals and M&A motives.

Journal of Economics and Finance, 1993

International Journal of Scientific Research, 2012

International Journal of Accounting and Financial Reporting

Purpose: This paper aims to review the prior literature on payment methods in Mergers and Acquisitions (M&As) and summarizing its effects on the performance of companies involved in M&As. This study also attempts to find out various determinants of the payment methods of M&As that affects the decision of payment methods in M&As. Methodology: To carry out the analysis, this study focuses the past literature relating to payment methods in M&As and summarizes the positive and negative effects of different payment methods. The review is carried out by dividing into four parts (i) Literature studies on cash payment method (ii) Literature studies on stock payment method (iii) Literature studies on mixed payment and (iv) Determinants of payment methods. The paper investigates based on the findings of the major studies.Research limitations: The scope of the study is confined to the contemporary review of M&As literature than the empirical survey. The study is focused more on giving suggesti...

Corporate Ownership and Control, 2012

Using the UK data and the standard Event Study methodology framework, the wealth effects of target and acquiring companies involved in merger and acquisition activities over the period from 2000 to 2010 is investigated. Further, we extend our analysis to examine the financing payments of M&A transactions using various test models, namely the size-deciles (SD) control model, Hoare-Govett small companies model, index model (IM), market model (MM) and the capital asset pricing model (CAPM). The results in general indicate that target companies obtain significantly positive and higher abnormal returns than those obtained by the UK acquirers. The results are positively associated with cash offers used in financing the merger and acquisition transactions. Consistent with previous studies we found no clear pattern of abnormal returns around the announcement period for the UK acquirers. Interestingly, the five different test models are generally found to produce similar levels of abnormal r...

1994

Although wide variation in the type of consideration offered in corporate acquisitions is observed in practice, little is known about how bidders or targets choose the method of payment in takeovers. Further, several empirical studies report that shareholders of both targets and bidders earn higher returns in cash offers than in equity offers, but the reasons for this more favourable impact of cash offers have not been empirically established. This study attempts to fill these gaps in the literature by addressing three research questions:- 1) What factors determine the method of payment used by bidders in corporate acquisitions? 2) How do target shareholders choose between cash and equity when the bidder has offered "equity with a cash alternative" as the method of payment? 3) Why are bid premia higher in cash offers than in equity offers? In examining how bidders choose the method of payment this study in contrast to all previous studies, emphasises that there is a simult...