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An investigation into withdrawing from M&A deals : evidence from the United States

Show simple item record Balmanian, Alvart Garabed 2019-04-02T09:21:21Z 2019-04-02T09:21:21Z 2018
dc.identifier.citation Balmanian, A.G. (2018). An investigation into withdrawing from M&A deals : Evidence from the United States (Master's thesis, Notre Dame University-Louaize, Zouk Mosbeh, Lebanon). Retrieved from en_US
dc.description MSFRM -- Faculty of Business Administration and Economics, Notre Dame University, Louaize, 2017; "A thesis submitted in partial fulfillment of the requirements for the degree of the Master of Science in Financial Risk Management (MSFRM)"; Includes bibliographical references (leaves 52-63). en_US
dc.description.abstract Purpose: This study investigates whether managers withdraw from a M&A deal once they observe a negative cumulative abnormal return. Moreover, it assesses whether their decision changes with respect to factors such as the listing status of the firm, its macro industry, and target size. Design/methodology/approach: Using a sample of 767 M&A US deals over the period 2005-2014 and applying an Event Study methodology, Cumulative Abnormal Returns (CAR) are calculated and introduced in a Logit model to assess the above mentioned matter. Findings: Results show that managers do listen to the market when observing a negative CAR during the acquisition announcement period; hence, they withdraw from the takeover deal. Moreover, managers of firms who are acquiring a private target firm and/or a diversifying target firm ignore the market reaction, and the likelihood of deal cancellation does not change. However, whenever the target firm is a public firm and from the same industry, the likelihood of deal cancellation increases. Furthermore, there is simply no effect of CAR on the likelihood of deal cancellations in large acquisitions. Research limitations/Implications: A theoretical implication for this study lies in examining the implications of the Agency Theory on manager’s decisions. However, like any other research, this study faces some limitations, in particular, having more firm specific data, defining the characteristics of a private and public target, and defining the structure of acquirer firm. Practical implications: A practical implication for this study lies in informing decision makers of the different variables affecting the likelihood of withdrawal or success of M&A deals. Originality/value: Despite the academic attention paid to the subject of M&A, there is a research gap in studying whether managers listen to the market. Hence, this study attempts to fill this gap by constructing a comprehensive model that assesses the effect of identified variables on the decision to withdraw or stay. en_US
dc.format.extent vii, 63 leaves ; illustrations
dc.language.iso en_US en_US
dc.publisher Notre Dame University-Louaize en_US
dc.rights Attribution-NonCommercial-NoDerivs 3.0 United States *
dc.rights.uri *
dc.subject.lcsh Consolidation and merger of corporations
dc.subject.lcsh Industrial management
dc.subject.lcsh Efficient market theory
dc.title An investigation into withdrawing from M&A deals : evidence from the United States en_US
dc.type Thesis en_US
dc.rights.license This work is licensed under a Creative Commons Attribution-NonCommercial 3.0 United States License. (CC BY-NC-ND 3.0 US) en
dc.contributor.supervisor Menassa, Elie, Ph.D. en_US
dc.contributor.department Notre Dame University-Louaize. Graduate Division en_US

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Attribution-NonCommercial-NoDerivs 3.0 United States Except where otherwise noted, this item's license is described as Attribution-NonCommercial-NoDerivs 3.0 United States

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