The impact of M&A on shareholders’ Value; Determinants of the acquirer value creation; Empirical evidence from the Swedish Market.

Abstract: The purpose of this thesis is to investigate the impact of M&A announcement on the acquirer shareholders' value in the Swedish market. We further aim to find the determinants behind these changes in the acquirer stock prices. The theory of this study is based on previous research in the area of M&A‟s and the related theories in the literature such as the Agency theory, The efficient market theory, Hubris theory, overpayment theory, information asymmetry theory, Cash flow theory, and tax theory. The Cumulative average abnormal returns in the Swedish market (CAAR) during the period 2010-2020 are positive, and driven by: the target company management performance, the method of payment, the target company capital structure, the deal premium paid, and the acquirer Cash flow. M&A in the Swedish market between 2010-2020 has created Cumulative Average abnormal returns (CAARs) of approximately 9% to the acquirer firms. We have found that the target company management performance has a positive impact on CAARs, While Cash only payments have a negative effect. We have also found a negative relationship between the acquirer cash flows and CAARs, additionally, we conducted that target companies with a high leverage ratio have a negative impact on the acquirer firm CAARs. Finally, we have found a negative relationship between the deal premium paid and the acquirer CAARs.