We would like to thank Yakov Amihud, Christos Cabolis, Ettore Croci, John Doukas, Mara Faccio, Jayant Kale, Aneel Keswani, Meziane Lasfer, Spencer Martin, Krishna Paudyal, Ramesh Rao, and Frederik Schlingemann, as well as seminar participants at the ALBA Graduate Business School, Cass Business School, Sabanci University, and participants at the European Finance Association (EFA) Conference (2008), the European Financial Management Association (EFMA) Conference (2008), the Southwestern Finance Association (SWFA) Conference (2009), the Southern Finance Association (SFA) Conference (2009) and the Midwest Finance Association (MFA) Conference (2010) for useful comments and suggestions. We are also grateful for the insightful comments received from Bill Christie (editor) and two anonymous referees. Travlos acknowledges financial support received from the Kitty Kyriacopoulos Chair in Finance. All errors are our own.
Gains from Mergers and Acquisitions Around the World: New Evidence
Version of Record online: 6 DEC 2010
© 2010 Financial Management Association International
Volume 39, Issue 4, pages 1671–1695, Winter 2010
How to Cite
Alexandridis, G., Petmezas, D. and Travlos, N.G. (2010), Gains from Mergers and Acquisitions Around the World: New Evidence. Financial Management, 39: 1671–1695. doi: 10.1111/j.1755-053X.2010.01126.x
- Issue online: 6 DEC 2010
- Version of Record online: 6 DEC 2010
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 United States, United Kingdom, and Canada) pay lower premia and realize gains, 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.