The brewing industry has recently experienced increased merger activity. This paper analyzes the shortterm wealth effects of horizontal mergers and acquisitions on acquirers in the brewing industry. Based on a sample of 69 takeover announcements between 1998 and 2010, significant positive...

In an event study where at least some of the sample firms have their equity securities listed in more than one market, the question arises as to which is the most appropriate market (or markets) to use for the purpose of estimating mean abnormal returns. When arbitrage activity across these...

We show an inverted-U relation between targetiveness (probability of being targeted) and firm size. However, this pattern describes stock offers and is more pronounced during hot markets characterized by higher stock valuations. For cash offers we find a negative and monotonic relation. These...

The deregulation process in the EU electricity sector triggered strategic decisions that led to industry restructuring. This paper presents preliminary evidence of the impact of this process on investors, using event studies and estimation techniques such as least squares and GARCH. Our findings...

This paper connects three subjects related to international financial markets – (i) information asymmetry, (ii) market segmentation, and (iii) cross-listings – and highlights their implication for event study methodology. When firms list equities on more than one exchange, and the exchanges...

We examine 136 M&A deals from 1997 to 2007 initiated by Chinese companies listed on the Shanghai and Shenzhen Stock Exchanges, where the acquirer gains complete control of the target. Our data shows that the Chinese M&A market is dominated by domestic deals with unlisted targets that are either...

This paper tests the effect of firms' mispricing and investment opportunities on the method of payment in mergers. Using a new proxy for investment opportunities and a sample of 1187 mergers completed between 1990 and 2005 among US publicly traded firms, I find that acquirers lead the decision...

Theory and recent evidence suggest that overvalued firms can create value for shareholders if they exploit their overvaluation by using their stock as currency to purchase less overvalued firms. We challenge this idea and show that, in practice, overvalued acquirers significantly overpay for...

This paper establishes that credit ratings affect the choice of payment method in mergers and acquisitions. We find that bidders holding a high rating level are more likely to use cash financing in a takeover. We attribute this finding to lower financial constraints and enhanced capability of...

Bidders have an incentive to pay with stock when their shares are overvalued, but target firms should be reluctant to accept such overvalued payment. In a sample of 2978 acquisitions, we find that stock payment is readily accepted only when the bidder can justify the financing decision in terms...