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The effect of mergers and acquisitions on long-run financial performance of acquiring companies
Dissertation (MBA)--University of Pretoria, 2012.
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| Format: | Thesis |
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University of Pretoria
2013
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| _version_ | 1867613514414161920 |
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| access_status_str | Open Access |
| author2 | Ward, Mike |
| author_browse | Ward, Mike |
| author_facet | Ward, Mike |
| collection | Thesis |
| dc_rights_str_mv | © 2011, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria. |
| description | Dissertation (MBA)--University of Pretoria, 2012. |
| format | Thesis |
| id | oai:repository.up.ac.za:2263/25987 |
| institution | University of Pretoria (South Africa) |
| last_indexed | 2026-06-10T12:37:21.635Z |
| license_str | Other — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UPSpace — University of Pretoria Institutional Repository |
| publishDate | 2013 |
| publishDateRange | 2013 |
| publishDateSort | 2013 |
| publisher | University of Pretoria |
| publisherStr | University of Pretoria |
| record_format | dspace |
| source_str | UPSpace — University of Pretoria Institutional Repository |
| spelling | oai:repository.up.ac.za:2263/25987 The effect of mergers and acquisitions on long-run financial performance of acquiring companies Ward, Mike ichelp@gibs.co.za Halfar, Dieter Bernhardt UCTD Long-run performance Acquisitions Intrinsic value Abnormal returns Operating financial performance Dissertation (MBA)--University of Pretoria, 2012. Mergers and acquisitions continue to enjoy importance as strategies for achieving growth, although their success in creating shareholder value remains contested. The aim of this research was to evaluate whether, in the long-run, acquiring companies created or destroyed value by evaluating the differences between pre- and post-acquisition firm performance, using, abnormal share price performance, operating financial performance and intrinsic value performance metrics. This research used a non-representative, judgemental sample of 29 JSE listed firms to conclude that, on average, mergers and acquisitions destroy value within two years post-acquisition, although some evidence was found in support of acquiring firm value creation in the third year after the acquisition. Results indicated a significant -6.62% decline in acquiring firm average cumulative average abnormal return (ACAAR) between 504 trading days before and after acquisition announcement dates. This finding reversed in year three, resulting in a positive ACAAR of 8.76%. Similarly, average intrinsic value (AIV) performance indicated that between one year before and one year after the acquisition, AIV deteriorated with a significant -0.131. However, between year one and two after the acquisition, AIV recovered by 0.112. Overall evidence indicated positive and significant AIV growth of 0.370 between one year before and three years after the acquisition. The research found insignificant results for the pre and post-acquisition evaluation of industry-adjusted cash-flow return on all assets (IACRAA). Gordon Institute of Business Science (GIBS) unrestricted 2013-09-07T01:48:39Z 2012-09-21 2013-09-07T01:48:39Z 2012-03-08 2012-09-21 2012-07-01 Dissertation Halfar, DB 2011, The effect of mergers and acquisitions on long-run financial performance of acquiring companies, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://hdl.handle.net/2263/25987 > F/12/4/651/zw http://hdl.handle.net/2263/25987 http://upetd.up.ac.za/thesis/available/etd-07012012-112048/ © 2011, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria. application/pdf University of Pretoria |
| spellingShingle | UCTD Long-run performance Acquisitions Intrinsic value Abnormal returns Operating financial performance The effect of mergers and acquisitions on long-run financial performance of acquiring companies |
| title | The effect of mergers and acquisitions on long-run financial performance of acquiring companies |
| title_full | The effect of mergers and acquisitions on long-run financial performance of acquiring companies |
| title_fullStr | The effect of mergers and acquisitions on long-run financial performance of acquiring companies |
| title_full_unstemmed | The effect of mergers and acquisitions on long-run financial performance of acquiring companies |
| title_short | The effect of mergers and acquisitions on long-run financial performance of acquiring companies |
| title_sort | effect of mergers and acquisitions on long run financial performance of acquiring companies |
| topic | UCTD Long-run performance Acquisitions Intrinsic value Abnormal returns Operating financial performance |
| url | http://hdl.handle.net/2263/25987 http://upetd.up.ac.za/thesis/available/etd-07012012-112048/ |