Unlocking Shareholder Value : A Study of Mergers and Acquisitions in Sweden

Abstract: This thesis examines whether mergers and acquisitions (M&A), ranging from 2009 to 2020, are value-generating for acquiring shareholders in the short-term and long-term of companies listed on the Stockholm Stock Exchange. A cohesive and integrated theoretical framework is formed in which six firm-specific and deal-specific variables are hypothesized to have varying impacts on both short- and long-term stock performance for acquiring shareholders. An event study was conducted to measure the short-term stock performance, i.e. cumulative abnormal returns (CAR), and long-term stock performance, i.e. buy-and-hold abnormal returns (BHAR). We find that M&A transactions are, on average, value-generating for acquiring shareholders in both the short term and the long term. Among the significant findings of the variables examined, firm size was negatively related to short-term stock performance but positively related to BHAR. The relative size of the transaction was found to be positively related to CAR. Furthermore, transactions mediated with cash were found to be positively related to BHAR. Lastly, related transactions were found to be positively related to CAR, although not when accounting for robust standard errors.