Kortsigtet værdiskabelse gennem M&A i Europa: Et eventstudie af den kortsigtede værdiskabelse for køber og sælger ved M&A annonceringer på det europæiske marked i perioden 2013 til 2022

Abstract

Mergers and acquisitions (M&A) have been a popular strategy for firms seeking to create value by expanding their operations, increasing market share, or accessing new technologies. However, there are several risks associated with pursuing value creation through M&A. One significant risk is overpaying for the target company, which can result in a lower return on investment or even a loss. Additionally, M&As can lead to cultural clashes and difficulty integrating the two firms, which can impede the realization of expected synergies.

This thesis studies the short-term value creation for both the acquirer and target, examining the market's reaction to an M&A announcement in the European Union from 2013 to 2022. Using an event study methodology, four event windows of ±10, ±5, ±3 and ±1 day around the announcement have been chosen to capture the market’s response. Furthermore, this thesis analyzes four value drivers’ potential impact on the abnormal return using cross-sectional regression analysis. The total dataset in this thesis consists of 132 acquirers and 106 targets across 156 transactions, all inside the European Union.

This thesis finds no statistical evidence that acquirer shareholders realize an abnormal return across all four event windows. The target shareholders receive a range of 12% to 16% in significant abnormal returns across all event windows.

The cross-sectional analysis finds no statistically significant difference in the abnormal return when comparing domestic and cross-border transactions and focused or diversified transactions. Substantial evidence finds that the acquirer shareholders receive a higher positive abnormal return when paying with a mixed payment than with cash or stocks. Lastly, the analysis finds that the size of the free cash flow has no statistically significant impact on the abnormal return for the acquirer and target shareholders. The results provide important insights for companies considering M&A as a strategy for value creation.