Return to shareholders of US targeted companies acquired by foreign corporations Article

Parhizgari, AM, De Boyrie, ME. (1995). Return to shareholders of US targeted companies acquired by foreign corporations . 5(4), 265-272. 10.1080/758536877

cited authors

  • Parhizgari, AM; De Boyrie, ME

authors

abstract

  • International mergers and acquisitions are studied by examining the returns to shareholders of US targeted firms acquired by Japanese, British, Canadian, French and German corporations during the period 1979-90. Using a multivariate regression model under a variety of estimation procedures, i.e., OLS, SUR, ARCH, and ‘pooling methods’, it is found that, in the long run, contrary to prior studies, the event parameter estimators (or abnormal performance estimators) for the targeted firms are mostly negative and insignificant, implying no change or even a loss in shareholders' rate of return. However, in the short run, the results are to some degree consistent with previous studies in that the returns on targeted firms by foreign corporations increase or decrease for a few days after the announcement day and later disappear due to possible dissemination of information. The extent of this change, however, is limited to about 20% or less of all the targeted firms studied. © 1995, Taylor & Francis Group, LLC. All rights reserved.

publication date

  • January 1, 1995

Digital Object Identifier (DOI)

start page

  • 265

end page

  • 272

volume

  • 5

issue

  • 4