Mergers and Acquisitions in the Dutch Stock Market

Abstract:     
In this study, we examine the Dutch mergers and acquisitions market for the ten-year period 1997-2006. This study only includes cases where the target company was quoted on the Dutch stock exchange. On average in the 20 days before the announcement of a takeover, targets outperform the market by 5.4%, while on the day of the announcement the stock enjoys an additional premium of 14.7%, resulting in a compounded total premium of 20.9%. The total premium for mergers is 5.8% and for acquirers -1.8%. In the two years following the day of the announcement, the eleven mergers in our sample show an average annual underperformance of 7.5% after correcting for beta, size, and the value factor.

Number of Pages in PDF File: 24

Keywords: merger, acquisition, announcement premium, Dutch stock market

JEL Classification: G12, G14, G34

working papers series