Gains from Mergers and Acquisitions Around the World: New Evidence

Financial Management Journal, Forthcoming

41 Pages Posted: 20 Jun 2009 Last revised: 27 Jun 2010

See all articles by George Alexandridis

George Alexandridis

ICMA Centre, Henley Business School

Dimitris Petmezas

University of Surrey - Surrey Business School

Nickolaos G. Travlos

University of Surrey; ALBA Graduate Business School

Date Written: June 20, 2009

Abstract

Using a global M&A data set, this paper provides evidence that the empirical observations relating public acquisitions to, at best, zero abnormal returns, and their stock-financed subset to negative abnormal returns for acquiring firms around the deal announcement are not unanimous across countries. Acquirers beyond the most competitive takeover markets (the U.S., U.K., and Canada) pay lower premia and realize gains, on average, while share-for-share offers are at least non-value destroying for their shareholders. In contrast, target shareholders within these markets gain significantly less, implying that the benefits generated are more evenly split between the involved parties. The degree of competition in the market for corporate control is a robust determinant of shareholder gains and takeover premia after controlling for deal, firm characteristics, and other differences across countries.

Keywords: Public acquisitions, competition, premium, acquisition gains, method of payment

JEL Classification: G11, G14, G34

Suggested Citation

Alexandridis, George and Petmezas, Dimitris and Travlos, Nickolaos G., Gains from Mergers and Acquisitions Around the World: New Evidence (June 20, 2009). Financial Management Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1423026

George Alexandridis

ICMA Centre, Henley Business School ( email )

Whiteknights Campus
P.O. Box 242
Reading, RG6 6BA
United Kingdom
+44 (0) 118 378 4387 (Phone)

Dimitris Petmezas

University of Surrey - Surrey Business School ( email )

Guildford, Surrey GU2 7XH
United Kingdom

Nickolaos G. Travlos (Contact Author)

University of Surrey ( email )

Guildford
Guildford, Surrey GU2 5XH
United Kingdom

ALBA Graduate Business School ( email )

Athinas Ave. & 2A Areos Str.
Vouliagmeni 166 71, Athens
Greece

HOME PAGE: http://www.alba.edu.gr

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