Title page for ETD etd-03122010-154951

Document Type Master's Dissertation
Author Kyei, Kofi
URN etd-03122010-154951
Document Title The long term impact of large acquisitions on the share price performance of acquiring companies listed on the JSE
Degree MBA
Department Gordon Institute of Business Science
Advisor Name Title
Prof M Ward Supervisor
  • mergers and acquisitions
Date 2010-03-12
Availability unrestricted

To acquire, or not to acquire? The debate rages on. Companies have been acquiring other companies for centuries, and still, both scholars and practitioners cannot agree on whether acquisitions create and destroy shareholder value. The contradictory results of research into the value creation or value destruction nature of acquisitions has not dampened the will of those corporate executives with a penchant for buying other firms. Globally, and albeit affected by the general well being of the economy, the value and quantities of acquisitions continues to show strong growth.

It is largely accepted that large acquisitions are executed as strategic initiatives which should yield benefits in the medium to long‐term. Using event study methodology with a control portfolio model, this study aimed to evaluate the validity of this claim and ascertain if, at the 5% confidence interval, 14 large acquisitions by companies listed on the JSE achieved significant share price gains in the 378 trading days (18 months at an average of 21 trading days per month) after the acquisition.

This study concluded that large acquisitions had statistically; no impact on the long term share price returns of JSE listed acquiring companies.

Copyright 2008, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria.

Please cite as follows:

Kyei, K 2008, The long term impact of large acquisitions on the share price performance of acquiring companies listed on the JSE, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-03122010-154951/ >


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