Figure 2.2: Key motivations for pursuing the dealNoted: some respondents selected more than one option
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CHAPTER 3: LITERATURE REVIEW......................................11
3.1) CAAR Method and M&A Performance ..........................11
3.2) Determinants of M&A performance ..................................13
CHAPTER 4: RESEARCH METHODOLOGY .............................28
4.1) Data Collection...............................28
4.2) CAAR Calculation .....................30
CHAPTER 5: RESULT AND DISCUSSION.................................35
5.1) Deal Samples.......................35
5.2) Average Abnormal Return of Acquirers’ Stock...............................39
CHAPTER 5: RESULTS AND DISCUSSION
5.1) Deal Samples
Sample deals used in this study are taken from Zephyr’s database. Thecriteria used to select samples are as follow:
a) Acquirers can only be Thai listed companies in SET and MAI whiletargets can be any listing status from any country;
b) The M&A announcement dates occurred during Jan 1st, 2009 and Dec31st, 2018;
c) Methods of payment are scoped down to cash and share payment;
d) Deals that have percentage of stake lower than 50% are deducted;
e) The current deal status needs to be completed or assumed completed;
f) Deal values in USD are known.
After applying these criteria, there are some deal samples are filtered outdue to unavailability of stock’s daily closing prices which are necessary forCAAR calculation. As a result, there are 211 deal samples left in this study.
Table 5.1: Deal samples by categories
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CHAPTER 6: CONCLUSION
6.1) Conclusion
There are 2 main focuses of this study. Firstly, the impact of M&A onshort-term financial performance is studied and analyzed in many variousevent windows. Average Abnormal return and cumulative average abnormalreturn are used to represent the short-term performance of M&As. Secondly,this study also aims to provide more understanding of the relationship betweenownership stake and the acquirer’s abnormal return. The study focuses on themarket reaction in The Stock Exchange of Thailand to merger and acquisitionannouncements during the event window of 21 days. Deal samples used in thestudy are based on the availability of data and scoped to be from Jan 1st, 2009to Dec 31st, 2018. The abnormal return of the acquirer’s stock is used torepresent the performance of acquirers during the M&A announcement date.The determinants that are included as control variables are listing status of thetarget firm, payment method, geographical origin, acquisition strategy whetherit is horizontal, vertical or conglomerate integration and size of the deal.
Abnormal returns of the acquirer’s stock can be studied and analyzedvia hypothesis testing on cumulative average abnormal return and averageabnormal returns. The result shows that the M&A can significantly lead to apositive average abnormal return to the shareholders or investors on days 7, 8,9 and 10 after the M&A announcement date. Cumulative average abnormalreturns of acquirers are divided into 6 periods of time ranges for a betterunderstanding. The results show that CAARs are significantly positive on theevent windows of (T-10, T+10), (T+1, T+5) and (T+5, T+10) at 99%confidence level. The result reflects that the M&A announcement dates cancreate value for the acquirer’s shareholders in the mentioned time ranges. Thisresult implies that the information in the public is very well responded to thestock market in Thailand which aligns with the finding of Wong (2016) whoalso studies and concludes that the Thai stock market belongs in a semi-strongform of market efficiency. The finding suggests investors consider investingin the acquirer’s stock during the M&A announcement date. The highestabnormal returns of the acquirer’s stock happen in the range of (T-10, T+10),(T+1, T+5) and (T+5, T+10) respectiv
