Browsing by Subject "Mergers"

Now showing 1 - 4 of 4

Open Access
Effect of growth and medium of growth on resilience to global financial crisis
(2022-12) Bulut, Emre
This dissertation comprises three chapters about investor reactions to significant events and the growth strategy of large banks in the global financial crisis. The first chapter focuses on the subprime mortgage phase of the crisis. We examine whether investors significantly reacted to events until Lehman Brothers’ collapse. We use the event study methodology to calculate abnormal returns of large banks in the sample. We find that investors reacted significantly to the events. As the crisis approaches, investors’ reaction becomes more significant. Results suggest that Lehman Brothers’ collapse is not a cause but a result of the crisis. The second chapter investigates the effect of the growth strategy of large banks on investor reactions to significant events during the global financial crisis. We construct a growth index decomposing into the merger index and organic growth index. Using the event study methodology, we find abnormal returns of the large sample banks. Applying cross-sectional event-specific and pooled OLS regressions, we analyze cross-sectional variations of investor reactions to significant events. Results indicate that investors significantly reacted to the growth strategy of large banks after the Lehman Brothers’ collapse but not before. The third chapter examines investor reactions in Europe to major events until the Lehman Brothers’ collapse. We calculate the abnormal returns of fifty-four banks across sixteen countries in Europe with the event study methodology. Our findings show that investors react significantly to the events as the Lehman Brothers’ failure comes closer. Hence the Lehman Brothers’ bankruptcy is a major turning point during the crisis.
Open Access
Global Merger and Acquisition (M&A) activity: 1992-2011
(Elsevier Ltd, 2016) Yılmaz, I. S.; Tanyeri B.
In our global sample of 263,461 deals in 47 countries, 3-day target cumulative abnormal returns (CARs) average 6.9% and bidder CARs average 1.4%. When we impose the common filters used in the literature which restrict the sample to completed acquisitions of public firms, target CARs increase from 6.9% to 13%. Our findings indicate that M&A activity (particularly in deals where control rights are sold) generates value. We also find that the magnitudes of bidder and target CARs in developed countries are higher than those in emerging-market countries.
Open Access
M&A activity during the COVID-19 pandemic
(Taylor&Francis, 2023-05-24) Ançel İlaslan, Z.; Tanyeri-Günsür, Başak
We investigate whether the COVID-19 pandemic initiated merger waves at the aggregate and industry levels. The COVID-19 pandemic coincides with economic shocks, wide adoption of new technologies, and volatility in stock and energy markets, all potential triggers of restructuring activity. Our sample covers 104,464 acquisition deals of US targets from 2012 to 2022. We identify 37 industry-level merger waves. Twenty-three merger waves start during the COVID-19 pandemic. Eighty percent of the deals during the pandemic were part of an industry merger wave. This concentration of industry waves drove an aggregate merger wave starting on April 2020.
Open Access
Stock-market reactions to mergers of non-financial Turkish firms
(2010) Hekimoğlu, Mert Hakan
This study investigates stock-market reactions to mergers of non-financial Turkish firms. I conduct an event study to detect abnormal stock returns of Turkish target firms around merger announcements. In an efficient market, movements in stock prices (returns) reflect investors’ assessments of new information about the firm and its operating environs. Assuming market efficiency, event studies model “normal” returns. Abnormal returns are the difference between realized returns and normal returns. The sample consists of 125 mergers from July 1991 to July 2009. This study reveals that Turkish targets earn on average a cumulative abnormal return of 8.56% in the three-day window around merger announcements when control rights in target firms change hands. This study contributes to the merger literature by providing evidence that markets react positively to merger announcements of Turkish target firms. However, reaction of Turkish markets generates smaller returns than the reaction of US and European markets. Stock market’s reaction to merger announcements may differ from country to country as well as announcement date specification is problematic for Turkish firms which may be the reason for smaller returns in Turkish markets.