Method of Payment in Mergers and Acquisitions: The Case of Saudi Arabia

Proceedings of the 32nd International Business Information Management Association Conference, IBIMA 2018

7 Pages Posted: 30 Apr 2019

See all articles by Nadisah Zakaria

Nadisah Zakaria

Prince Sultan University

Kamilah Kamaludin

Prince Sultan University

Alya AlKhalifa

Prince Sultan University

Date Written: November 15, 2018

Abstract

This study examines the long-run share performance of acquirer’ companies listed on the Saudi Arabia Stock Exchange (Tadawul) from 1st January 2000 to 31st August 2017. Using the buy-and-hold abnormal return method, the present study finds that the acquirer companies’ shares for the cash payment method continues to outperform their counterparts of non-cash payment against the equal- weighted and value-weighted indexes. The presence of abnormal return opportunities that may be exploited by investors in the three-year holding period following the completion of M&A events might provide valuable insight to individual and institutional investors. As there is no national evidence on share performances of acquirer’s companies over the long-run period, the present findings add to a growing body of M&A literature.

Keywords: Mergers, Acquisitions, Short-And-Long Run Performance, Saudi Arabia, Buy-And-Hold Abnormal Return, Market Adjusted Return, Market Efficiency, Equal-Weight, Value-Weight

JEL Classification: G34

Suggested Citation

Zakaria, Nadisah and Kamaludin, Kamilah and AlKhalifa, Alya, Method of Payment in Mergers and Acquisitions: The Case of Saudi Arabia (November 15, 2018). Proceedings of the 32nd International Business Information Management Association Conference, IBIMA 2018 , Available at SSRN: https://ssrn.com/abstract=3361943 or http://dx.doi.org/10.2139/ssrn.3361943

Nadisah Zakaria

Prince Sultan University ( email )

Business Administration Department
Prince Sultan University
Riyadh, Riyadh 11586
Saudi Arabia

Kamilah Kamaludin (Contact Author)

Prince Sultan University ( email )

PO Box 66833
Riyadh, 11586
Saudi Arabia

Alya AlKhalifa

Prince Sultan University ( email )

PO Box 66833
Prince Sultan University
Riyadh, Riyadh 11586
Saudi Arabia

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