The impact of mergers and acquisitions on shareholder value : pre and post merger analysis

Abstract

This thesis examines whether mergers and acquisitions (M&A) in the technology industry create or destroy shareholder value in the short-term and how deal characteristics effect outcomes. Using a standard short-term event study approach, expected returns are estimated using the CAPM model, with a 250-trading day estimation window and abnormal returns, average abnormal returns and cumulative average abnormal returns are measured over a 41-day event window around the announcement. The sample used in the study is made up of publicly listed acquirers and targets involved in technology deals announced between 2015 and 2025. The results obtained from this study replicate the pattern observed in previous literature; targets earned large gains concentrated around the announcement day and acquirer reactions are near zero to slightly negative on average. The study contributes recent, technology-specific, target and acquirer evidence on the reactions to M&A announcements and shows how payment method and geographic factors influence the immediate market reactions of M&A news.