The Valuation Effects of Mergers and Acquisitions: Evidence from the JSE Securities Exchange South Africa
Posted: 23 May 2008
Date Written: 2003
Abstract
This research determines whether South African firms engaging in M&A activity generate persistent monthly positive abnormal returns in the 36 months after the announcement of the event. The sample consisted of 299 M&A transactions (announced between 1988 and 1998). The benchmark was a control portfolio of industrial firms matched with size and book to market value ratio. The abnormal returns were calculated on an equally weighted basis and using calender time abnormal return and cummulative abnormal returns methods; both of which produced negative results.
Keywords: mergers and acqusitions, long term effect, Johannesburg stock exchange
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