Title page for ETD etd-03172010-120017

Document Type Master's Dissertation
Author Stevens, Trevor
URN etd-03172010-120017
Document Title The comparative impact of acquisitions on the financial performance of acquiring companies across market segments of the JSE
Degree MBA
Department Gordon Institute of Business Science
Advisor Name Title
Prof M Ward Supervisor
  • corporate profits
  • stock exchanges
Date 2009-04-01
Availability unrestricted

There is broad agreement in the literature that in general, mergers and acquisitions in both the short and long run are largely zero or negative, net present value exercises for the shareholders of the acquiring company. At the same time it is believed that significant returns are realised by the shareholders of the target companies. Despite this broad agreement and due to the complexity of the open market, there are still a large number of variables which can and could possibly account for many of the exceptions which have been highlighted in a range of studies. The aim of this study was to investigate whether there is any evidence to suggest that merger and acquisition activity in the different market sectors of the JSE are either, more or less successful than the average.

A total of 82 transactions were identified as meeting the strict requirements of the methodology. These included representatives from five sectors Basic Industries, Consumer Goods & Services, Financials, Information Technology and Resources. Event study methodology was used to investigate the abnormal returns of acquiring companies before and after the announcement of the event. It was established that in all but one of the market sectors there was statistically significant evidence that merger and acquisition transactions in different market sectors are either better or worse than the average at creating value for the acquiring company shareholders.

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:

Stevens, TG 2008, The comparative impact of acquisitions on the financial performance of acquiring companies across market segments of the JSE, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-03172010-120017/ >


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