The effect of acquisitions and tender offers in shareholder value: Evidence from publicly listed Nordic companies

摘要

Economies across the Nordics have experienced sluggish growth after the financial crisis and with plenty of cheap financing available, managers seek growth from mergers and acquisitions. Existing literature on mergers and acquisitions is abundant, however, the Nordic market has not been studied to the same extent. This study addresses the question whether mergers and acquisitions create value for shareholders and furthermore aims to shed light on how transaction and company specific factors contribute to that value.The study uses data of 144 acquisition events that took place between 2005 and 2010 with acquirers listed in Copenhagen, Helsinki and Stockholm stock exchanges. The im-pact of the events was measured with event study methodology using intraday data in a three day event window, 120 day estimation window and 5 minute timestep interval. Standardized cumulative abnormal returns are used as a proxy for value creation with a premise that investors’ are able to capture the long-term benefits of the acquisition and furthermore reflect it to the price of the underlying stock. The study finds that the sample acquisitions create standardized cumulative abnormal returns of 0.21% on an aggregate level with a strong reaction during the first 15 minutes after the acquisition announcement. Furthermore, our cross-sectional analysis indicated that transactions that used hybrid financing as consideration create greater returns com-pared to cash or stock financed transactions. Moreover the study finds that cross-border acquisitions create less value compared to non-cross border acquisitions. In addition target and offer type did not provide statistically significant impact on shareholder val-ue.