The Consolidation of the Global Brewing Industry and Wealth Effects from Mergers and Acquisitions

Abstract

The brewing industry has recently experienced increased merger activity. This paper analyzes the shortterm wealth effects of horizontal mergers and acquisitions on acquirers in the brewing industry. Based on a sample of 69 takeover announcements between 1998 and 2010, significant positive announcement returns were identified. In addition, the study finds significant positive returns for domestic transactions as well as cross-border deals involving targets in emerging markets. Other identified drivers of shortterm success include transaction size, acquirer size and the target’s public status. Furthermore, significant negative rival effects are identified across leading brewing groups, when missing a potential M&A opportunity.

Keywords: Mergers and Acquisitions, Brewing Industry, Announcement Returns, Acquirers

JEL Classification: G14, G34, Q14