Evaluation of the M&A Effectiveness of Stock Exchanges (Trading Platforms)

Numerous research papers are devoted to the analysis of the effectiveness of M&A transactions. However, their findings differ depending on the period and methodology. Moreover, only a few authors have explored the industry of stock exchanges and trading platforms in their works. Although large transactions regularly occur in this industry. The purpose of this study was to assess the effectiveness of M&A deals of stock exchanges and trading platforms. The database included 122 M&A transactions from 2000 to 2020. Conducted analysis allowed to estimate the effectiveness of M&A transactions from different points of view. The study showed that M&A announcement on the horizon 15 days before and after the announcement of the deal, on average, leads to a cumulative abnormal return of (2.1)%. Event study methodology was applied for assessment. The study also showed that on the horizon of three years M&A transactions on average lead to a decrease in ROA by 1 percentage point, all other things being equal. The estimate was obtained using linear OLS regression.