Gains from mergers and acquisitions : an empirical study on the Asia F&B industry

• Main Authors: Ang, Qian Hui, Seet, Hui Ling, Pao, Mary Wing In
• Other Authors: Ho Kim Wai
• Format: Final Year Project
• Language: English
• Published: 2013
• Subjects: DRNTU::Business::Finance::Mergers and acquisitions; DRNTU::Business::Finance::Corporate finance
• Online Access: http://hdl.handle.net/10356/51434
• Institution: Nanyang Technological University

This paper studies the gains from mergers and acquisitions. The result will provide insights on how the acquirer characteristics and deal attributes influence CAR. Unlike many researches that focus on US and UK, our research would be based on the Asia Pacific context. Through a sample of 120 transactions in the F&B industry from 2008 to 2012, we found that M&A would generate a small positive CAR for the listed acquirer in different event windows. This meant that the first M&A press announcement by an acquirer generally received positive market reaction. This is especially true when the target is an unlisted firm. Following, while controlling for the effect of stock exchange listing, we tested all these significant factors using a multivariate regression model against CAR. The result concluded that size of acquirer and premium paid have positive relationship with CAR, while maturity of acquirer and duration of M&A process have negative relationship. Our results have also shown that size of acquirer, maturity of acquirer and mode of payment are more significant in explaining CAR than other variables.