Announcement effects of mergers and acquisitions on financial institutions in Asia Pacific

• Main Authors: Loh, Bowei, Cai, Yanning, Lim, Amanda Lijuan
• Other Authors: Nanyang Business School
• Format: Final Year Project
• Language: English
• Published: 2011
• Subjects: DRNTU::Business::Finance::Mergers and acquisitions
• Online Access: http://hdl.handle.net/10356/43845
• Institution: Nanyang Technological University

This study seeks to address the announcement effect of Merger and Acquisitions (M&A) of the financial institutions in Asia Pacific. The research involves 92 successful merger transactions which took place between 1995 and 2010. Based on the efficient market hypothesis, share prices reflect the information for publicly listed firms. In this paper, an event study was conducted to measure the changes in shareholders’ value of the acquiring and target companies. In addition, a regression is employed to identify the influences to abnormal returns brought about by M&A. Our results showed that target firms, on average, gained shareholder value in different window periods. Bidder firms, on the other hand, revealed varying results that are predominantly gains but also include both zero and minimal losses.