Do Mergers and Acquisitions Increase Shareholder value? – An Event Study of companies within the renewable energy/cleantech industry

Abstract: This thesis research whether mergers and acquisitions in the renewable energy industry create value for the acquiring firms’ shareholders. To research this, an event study methodology has been employed where three different event windows are studied in the short term, and one event window is studied in the long term. All acquirers are listed in either Europe or the US, and the short-term samples consists of 150 deals, whereas the long-term sample consists of 133 deals between 2000 and 2018. To measure the acquiring firms’ added shareholder value, the study focuses on abnormal returns following an acquisition. A robustness test was conducted by performing the regression on the US and Europe sample separately, yielding similar results. The short-term study uses the cumulative abnormal returns, whereas the long-term study uses buy-and-hold abnormal return. The results of the short-term study indicate that mergers and acquisitions in renewable energy are value-adding for the shareholders of the acquirer, lending support to previous research in the field. However, the findings in the long-term study imply that mergers and acquisitions are value-destroying for the shareholders. Finally, the findings in general lack statistical significance with several results conflicting with previous empirical findings.