Wealth effects of business takeover announcements: The case of Australian acquirers' shareholders

Shrimal Perera; J. Wickramanayake; Ankit Mehta

doi:10.22495/cocv8i1c8p2

Wealth effects of business takeover announcements: The case of Australian acquirers' shareholders

Shrimal Perera, J. Wickramanayake, Ankit Mehta

Research output: Contribution to journal › Article › peer-review

Abstract

Australia has accounted for over 51 percent of mergers and acquisitions in the Asia Pacific region (excluding Japan) during 2004-2006. This paper investigates the short-horizon and long-horizon wealth effects experienced by shareholders of Australian acquirers following these domestic and cross-border business takeover announcements. The sample consists of 197 announcements. Results for domestic acquisitions suggest that acquirers' shareholders endure abnormal returns in the range of -1.07% and -1.86% per day in the short-horizon. The long-horizon wealth effects, however, were found to be inconclusive. Results for cross-border acquisitions show that acquirers' shareholders endure abnormal returns in the range of 1.02% and 1.26% per day in the short-horizon. This positive wealth effect, however, dissipates in the long-horizon.

Original language	English
Pages (from-to)	758-771
Number of pages	14
Journal	Corporate Ownership and Control
Volume	8
Issue number	1 I
DOIs	https://doi.org/10.22495/cocv8i1c8p2
Publication status	Published - 1 Jan 2010
Externally published	Yes

Keywords

Asia Pacific
Australia
Business takeovers
Calendar time methodology
Domestic and cross-border acquisitions

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10.22495/cocv8i1c8p2

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title = "Wealth effects of business takeover announcements: The case of Australian acquirers' shareholders",

abstract = "Australia has accounted for over 51 percent of mergers and acquisitions in the Asia Pacific region (excluding Japan) during 2004-2006. This paper investigates the short-horizon and long-horizon wealth effects experienced by shareholders of Australian acquirers following these domestic and cross-border business takeover announcements. The sample consists of 197 announcements. Results for domestic acquisitions suggest that acquirers' shareholders endure abnormal returns in the range of -1.07% and -1.86% per day in the short-horizon. The long-horizon wealth effects, however, were found to be inconclusive. Results for cross-border acquisitions show that acquirers' shareholders endure abnormal returns in the range of 1.02% and 1.26% per day in the short-horizon. This positive wealth effect, however, dissipates in the long-horizon.",

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author = "Shrimal Perera and J. Wickramanayake and Ankit Mehta",

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T1 - Wealth effects of business takeover announcements: The case of Australian acquirers' shareholders

AU - Perera, Shrimal

AU - Wickramanayake, J.

AU - Mehta, Ankit

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Y1 - 2010/1/1

N2 - Australia has accounted for over 51 percent of mergers and acquisitions in the Asia Pacific region (excluding Japan) during 2004-2006. This paper investigates the short-horizon and long-horizon wealth effects experienced by shareholders of Australian acquirers following these domestic and cross-border business takeover announcements. The sample consists of 197 announcements. Results for domestic acquisitions suggest that acquirers' shareholders endure abnormal returns in the range of -1.07% and -1.86% per day in the short-horizon. The long-horizon wealth effects, however, were found to be inconclusive. Results for cross-border acquisitions show that acquirers' shareholders endure abnormal returns in the range of 1.02% and 1.26% per day in the short-horizon. This positive wealth effect, however, dissipates in the long-horizon.

AB - Australia has accounted for over 51 percent of mergers and acquisitions in the Asia Pacific region (excluding Japan) during 2004-2006. This paper investigates the short-horizon and long-horizon wealth effects experienced by shareholders of Australian acquirers following these domestic and cross-border business takeover announcements. The sample consists of 197 announcements. Results for domestic acquisitions suggest that acquirers' shareholders endure abnormal returns in the range of -1.07% and -1.86% per day in the short-horizon. The long-horizon wealth effects, however, were found to be inconclusive. Results for cross-border acquisitions show that acquirers' shareholders endure abnormal returns in the range of 1.02% and 1.26% per day in the short-horizon. This positive wealth effect, however, dissipates in the long-horizon.

KW - Asia Pacific

KW - Australia

KW - Business takeovers

KW - Calendar time methodology

KW - Domestic and cross-border acquisitions

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DO - 10.22495/cocv8i1c8p2

M3 - Article

SN - 1727-9232

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SP - 758

EP - 771

JO - Corporate Ownership and Control

JF - Corporate Ownership and Control

IS - 1 I

ER -

Wealth effects of business takeover announcements: The case of Australian acquirers' shareholders

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Keywords

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