S/F/39. Event study of mergers and acquisitions

This paper is devoted to the detailed analysis of mergers and acquisitions of FTSE non-financial sector companies occurred in the period from 1994 to 2004. Long-rung and short-run study of effects on the wealth of shareholders is conducted. The paper starts with the comprehensive literature review of studies which investigated the performance of British companies after the mergers. The second part describes how the samples were formed and methodology employed in the analysis. All formulas are supported by the intuitive explanation and are easy to follow. The next part presents the results of the study. They are consistent with the majority recent event studies. Tables and graphs help to understand the processes happening during and after the merger. Finally methodological issues are highlighted and appropriate conclusions are made. This study with the high academic level of writing and intuitive explanation at the same time would be very useful for students conducting event studies not only with regard to mergers and acquisitions but IPO, public announcements and other events as well.