<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>Mergers and/or acquisitions (M&amp;A) are important business operations for firms that wish to diversify, become stronger and more competitive. The main objective of this paper is to investigate the impact of M&amp;A announcements on the abnormal stock returns of firms listed on the Portugal and Spain stock exchanges. The empirical work analyzed 29 trades in the PSI-20 and 25 trades in the IBEX-35, since the year 2000, using the event study methodology. Most of the research investigates corporate combinations that take place in international markets and among large firms. Therefore, a first contribution of this paper is to study the phenomenon in smaller markets and firms. The results suggest that the two markets react differently to announcements of M&amp;A. Overall, the findings seem to show that in the Portuguese market the joint firms present average gains and that in the Spanish market the joint firms present average losses, bidders have sharper reactions and targets have higher losses. The study also indicates that the abnormal returns of the Portuguese firms (especially the bidders) and the Spanish bidding firms tended to stabilize around a week after the announcement date. This conclusion is another useful contribution of the paper for academics and decision makers of corporate restructuring.</p>
</abstract>

Mergers and/or acquisitions (M&A) are important business operations for firms that wish to diversify, become stronger and more competitive. The main objective of this paper is to investigate the impact of M&A announcements on the abnormal stock returns of firms listed on the Portugal and Spain stock exchanges. The empirical work analyzed 29 trades in the PSI-20 and 25 trades in the IBEX-35, since the year 2000, using the event study methodology. Most of the research investigates corporate combinations that take place in international markets and among large firms. Therefore, a first contribution of this paper is to study the phenomenon in smaller markets and firms. The results suggest that the two markets react differently to announcements of M&A. Overall, the findings seem to show that in the Portuguese market the joint firms present average gains and that in the Spanish market the joint firms present average losses, bidders have sharper reactions and targets have higher losses. The study also indicates that the abnormal returns of the Portuguese firms (especially the bidders) and the Spanish bidding firms tended to stabilize around a week after the announcement date. This conclusion is another useful contribution of the paper for academics and decision makers of corporate restructuring.

Impact of M&amp;A Announcements on Listed Firms in the Iberian Markets

Studies in Business and Economics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Impact of M&A Announcements on Listed Firms in the Iberian Markets

{"article-title":"Impact of M&A Announcements on Listed Firms in the Iberian Markets"}

Mergers and/or acquisitions (M&A) are important business operations for firms that wish to diversify, become stronger and more competitive. The main objective...

Impact of M&A Announcements on Listed Firms in the Iberian Markets

Pubblicato online: 27 gen 2023

Pagine: 132 - 150

DOI: https://doi.org/10.2478/sbe-2022-0051

Parole chiave
Mergers and Acquisitions, Events Study, Stock Price, Abnormal Returns, Price Reaction

© 2022 Bruno F. S. Lobo et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Impact of M&A Announcements on Listed Firms in the Iberian Markets

Pubblicato online: 27 gen 2023

Pagine: 132 - 150

DOI: https://doi.org/10.2478/sbe-2022-0051

Parole chiaveMergers and Acquisitions, Events Study, Stock Price, Abnormal Returns, Price Reaction

© 2022 Bruno F. S. Lobo et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Parole chiave
Mergers and Acquisitions, Events Study, Stock Price, Abnormal Returns, Price Reaction