Year of Graduation
Performance Evaluation of the Cross-Border Mergers and Acquisitions in the Non-Ferrous Metallurgy
The purpose of this thesis is to analyze the effect of the transaction for the sampling of several companies in the non-ferrous metallurgy with subsequent study of effectiveness. There are many reasons for merger or acquisition. Through procedures as merger or acquisition sellers and buyers are able to achieve great benefits. Sometimes this is mutual benefit, sometimes not. This is a distinctive feature of such operations. This kind of transactions helps companies to achieve different types of synergy: operational, financial; get the company's rapid growth, vertical and horizontal integration. Cross-border mergers and acquisitions are one of the most important tools for increasing the share of sales to the foreign markets in a globalized world. All these positive features should lead to some kind of influence on the share price and its returns. The study of this effect and its consequences - one of the key objectives of this work. If there is any impact on the market, what is the probability that it is effective? The study of this idea is another major task of this work.This paper presents the results of a study evaluating the effectiveness of cross-border mergers and acquisitions in the non-ferrous metallurgy. There are described examples of mergers and acquisitions, as well as provided motivation for their implementation. There were highlighted the main reasons of the presence of inefficiency in the transactions. The review was carried out on event study methods, as well as on several methods for calculating the excess returns. There were examined the possibilities, the pros and cons of both parametric and non-parametric tests for this study. The effect of the transaction was studied for the sample of several companies in the non-ferrous metallurgy with the study of its effectiveness. As expected, due to sample size and its type, all hypotheses failed to obtain statistically significant results using Student's t test, however, when using the Mann - Whitney - Wilcoxon interesting results were obtained for some of the hypotheses. It was found that for the event of announcement of the transaction excess returns were not present, for both cross-border and noncross-border transactions. For the event of completion of the transaction, it was found that for cross-border transactions – abnormal returns are negative. After, to extend the results obtained there were compared abnormal returns of each of the stock exchanges and it was found that the highest excess return was observed on the London Stock Exchange for the event of completion of the transaction. On the basis of this study it can be concluded that further study of excess returns for cross-border transactions on London Stock Exchange is necessary to determine the factors affecting the occurrence of this inefficiency.