The effects of business acquisition to share prices and financial ratios of publicly listed companies under the food, beverage and tobacco industry

• Main Authors: Anteneo, Alyssa Lou P., Antolin, Marianne Bernadette, Del Mundo, Gecelle L., Garcia, Nico G.
• Format: text
• Language: English
• Published: Animo Repository 2012
• Subjects: Small business > Purchasing; Consolidation and merger of corporations; Accounting
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/10847
• Institution: De La Salle University

This study is about the effects of business acquisition on share prices and financial ratios of publicly listed acquirer companies under the food, beverage, and tobacco industry. To conduct a uniform research and arrive at an accurate conclusion, the researchers restricted the research to all publicly listed companies under the food, beverage and tobacco industry listed in the Philippine Stock Exchange as of February 2012 and who have acquired from 2000-2008. To determine if there is a significant increase or decrease on share prices, the researchers used pair wise t-test. Statistical results showed that share prices increased after acquisition. The researchers also used pair-wise t-test to determine if there is a significant increase or decrease on financial ratios such as with the book value per share (BVPS), dividend pay-out ratio (DP), earnings per share (EPS), return on assets (ROA), return on investment (ROI), and debt to equity ratio (DTE) of the acquirer company after business acquisition. Statistical results showed that all companies had an increase in BVPS, EPS, and DP after acquisition. On the other hand, some companies have increased and others decreased in both ROI and ROA. To determine if there is a significant relationship between on the share prices and financial ratios, the researchers used regression analysis. The researchers used dummy variables such as relative size and number of acquisitions of acquirer. Statistical results showed that BVPS, EPS, DP, and ROA are positively correlated to share price while DTE and ROA are negatively correlated to share price.