Influence of Information Management on the M&A Performance: Evidence From the USA

This paper examines the impact of information signals about the transaction on the stock return of the acquirer. The sample consists of 3,126 observations for the U.S. firms’ cumulative abnormal returns in 2010-2019. Foreshadowing, voluntary disclosed information, news in the media and analysts’ reaction are considered as the main information signals. Unlike prior studies, the focus is on different time periods of the M&A deal: pre-announcement, announcement, and before closed date periods. According to the obtained results, in each time period, there is an impact on stock returns. The main idea of the hypothesis about foreshadowing in the pre-announcement period has been confirmed, which is consistent with past research of Busenbark, 2018. In the announcement period the voluntary information can be used in order to improve the performance of the deal, whereas negative news background adversely affects the abnormal returns. Among other factors, the interim news events period might be used to enhance the return after the transaction. The practical application of the study is the ability of investors and managers to assess the impact of information factors on the success of the transaction.