Hit or miss? - Do acquisitions create value for the acquiring company’s shareholders? A long-term event study on acquisitions performed by Swedish IT companies.
Abstract: In this paper, we investigate the long-term post-event stock return performance of companies operating in the IT sector and listed on NASDAQ Stockholm by using 78 mergers and acquisitions deals performed in the 2009 – 2013 period. We apply the event study methodology, focusing on the buy-and-hold abnormal returns approach. Stock return performance is analyzed in comparison to the Swedish general market index, as well as the Swedish technology index, and a set of control firms. The study finds different results depending on the method used; however, the only statistically significant result suggests that acquisitions destroy value for the acquiring company’s shareholders, which is in line with the majority of previous research.
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