Værdiskabelse for opkøbende selskabers aktionærer ved M&A: Et eventstudie af den kortsigtede værdiskabelse for det opkøbende selskabers aktionærer i Europa i perioden 2010-2018

Daniel Lorentsen & Sylvester Hesseldal

Student thesis: Master thesis


In this thesis the short-term wealth gains for the acquiring company’s shareholders is investigated by applying the event study methodology to 1.173 acquisitions in Europe between 2010-2018. Most of the literature within the field is based on studies from the US, this thesis provides further evidence for the European region in the post-financial crisis era. Different motives for engaging in M&A are presented where the neoclassic theory explains that companies engage in M&A activity to create value through synergies. Asymmetric information challenges the neoclassic approach since management can have incentives to engage in M&A activity to pursue personal gains. Behavioral economics explains that hubris can cause management to overestimate their competencies and thereby engage in value-destroying acquisitions for the shareholders. Our findings can be summarized as follows: (1) On average the acquiring companies generates an abnormal return of 1,53 %. (2) The abnormal return is insignificantly different between the methods of payment. (3) Acquiring privately held targets lead to higher abnormal returns compared to acquiring public targets. (4) Large acquiring companies based on market cap generates lower abnormal returns compared to smaller acquiring companies. (5) The relative size of the acquisition has an amplifying effect on the abnormal return. We discuss the methodology of event studies and argue that the lack of a standardized method throughout the research results in limited comparability. Furthermore, the methodology struggles to isolate a specific effect which makes it difficult to conclude on economic theories.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2020
Number of pages130