The Impact of Acquisitions on Share Pricing and Long Term Performance – Empirical Evidence from the Global Automotive Industry

Automotive industry has faced intense consolidation pressure, which has lead to increasing number of M&As. However, empirical evidence has given controversial results suggesting that most of M&As are value destructive for acquiring companies and for acquiring companies’ shareholders. The objective of this master’s thesis is to examine how acquiring companies’ shareholders react to acquisition announcement and is the reaction in line with the long-term performance. This study uses empirical evidence from automotive industry, which has been characterized as an industry that holds large amount of vertical and horizontal synergies. Transaction data consists of 65 acquisitions made by publicly listed companies between 2008-2010. The short-term impact is tested by applying event study methodology while the long term operative performance is examined with accounting study methodology. The event study results indicate that during the three days after acquisition (t= 0-2), the acquiring firms’ stocks generate an abnormal return of 1.22% on average across all acquisitions. When long term performance is studied it is evident that acquiring companies perform better than the industry median pre- and post-transaction but there is no statistically significant evidence that the performance has increased. The only performance ratio indicating statistically significant decrease is Return on Equity (ROE). On long-term horizontal acquisitions seem to outperform conglomerate ones but otherwise deal characteristics do not have any statistically significant impact.

Certificate for One Share of Capital Stock in Nicola Valley Coal and Coke Company

Certificate for 1 share of capital stock in Nicola Valley Coal and Coke Company to Welland D. Woodruff, May 13, 1905.

Certificate for One Share of Capital Stock in St. Catharines Golf Club Ltd.

Certificate for 1 share of capital stock in St. Catharines Golf Club Ltd. to Dr. Thos. Woodruff, April 15, 1911.

Certificate for One Share of Capital Stock in the Lincoln County Greater Production Company

Certificate for 1 share of capital stock in the Lincoln County Greater Production Company to Hamilton K. Woodruff, Jan. 20, 1919.

Certificate for One Share of Capital Stock in St. Catharines Lawn Bowling Club

Certificate for 1 share of capital stock in St. Catharines Lawn Bowling Club to executors of the estate of Hamilton K. Woodruff, Dec. 23, 1933.

Letter to S.D. Woodruff from John I. Mackenzie regarding 1 share of the Long Point Company transferred from Alexander McInnes and 2 shares transferred from E.C. Clark

Letter to S.D. Woodruff from John I. Mackenzie regarding 1 share of the Long Point Company transferred from Alexander McInnes and 2 shares transferred from E.C. Clark. The shares were transferred to John I Mackenzie, Sept. 6, 1870.

Letter to Louis Cabot from S.D. Woodruff regarding Long Point shooting share

Letter to Louis Cabot from S.D. Woodruff regarding Long Point shooting shares. Jan. 14, 1886.

Letter (typed) from the H.H. Warner Co. to S.D. Woodruff which was enclosed with a payment of $2,500.00 for the shooting share transferred to Mr. Warner

Letter (typed) from the H.H. Warner Co. to S.D. Woodruff which was enclosed with a payment of $2,500.00 for the shooting share transferred to Mr. Warner. The letter also requests that Mr. Woodruff send a note explaining the general customs of the club, May 21, 1886.

ECONOMIC AND POLITICAL UNIFICATION OF GERMANY: 1815-1871. PART 2: THE SHARE OF THE PUBLIC SECTOR IN THE ECONOMY..

Rapport de recherche

Predictability Of Share Prices In India: A Study Of The Applicability Of Technical Analysis

In spite of the far longed practices of technical analysis by many participants in Indian stock market, none have arrived at the exact position of technical analysis as a tool for foretelling share prices. There is no evidence supporting that one has established its definite role in predicting the behaviour of share price and also to see the extent of validity (how far reliable) of technical tools in Indian stock market. The problem is the vacuum in the arena of securities market analysis where an unrecognised tool is practised, i.e., whether to hold on to technical analysis or to drop it. Again, as already stated in this chapter, its validity need not continue forever. It may become futile as happened in developed markets. Continuous practice of a tool, which is valid only during discontinuous times is also an error. The efficacy of different market phenomena in terms of their ability to foretell the extent and direction of the price movements and reliability thereof remain as not yet proved in. This requires further study in this area so that this controversy may be settled. A solution to the problem requires enquiring and establishing the applicability of technical analysis, if any, there is in the Indian stock market. The study has the following two broad objectives for the purpose of confirming the applicability, if any, of technical analysis in the Indian stock market. The first objective is to ascertain the current validity of ‘traditional holding with respect to patterns’ and the second objective is to ascertain the ‘consistent superiority’, if any, of technical indicators over non-signal strategies in return generation. The study analyses the five patterns, which are widely known and commonly found in publications. They are: (1) Symmetrical Triangles, (2) Rising Wedges, (3) Falling Wedges, (4) Head and Shoulders Top and (5) Head and Shoulders Bottom.

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