Shareholder Return in Swedish M&A, Pre and Post Financial Crisis

Abstract: This paper analyses various drivers for target shareholder return related to takeover bids on Nasdaq Stockholm between 2000 and 2016. For all takeovers analysed, we find announcement effects around 22 percent. Our results suggest that there are differences in the returns for hostile and friendly bids historically, but that no conclusion can be made whether takeover type have an impact on short-term wealth effects. There is strong evidence that all-cash payments generate 10 percent higher abnormal return than other payment methods. We further investigate whether there are any differences in target shareholder return between the periods pre and post financial crisis and what underlying factors that give rise to these differences, such as regulations, managerial behaviour and market-to-book ratios.