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Aviva plc (Norwich Union)

P/F/388. Merger of Norwich Union and CGU: shareholder wealth effects

WORDS:
8000
DATE:
2005
PRICE:
89.99 GBP

The paper reports on the merger of Norwich Union and CGU in 2000 examining its effects on the share prices of the two companies and offering an overview of the UK insurance industry and the rationale and motivations for the merger. Literature is reviewed on the theory of mergers and acquisitions, the effect of mergers on shareholder wealth, etc. Market Model and the Capital Asset Pricing Model (CAPM) are applied as research methodology in testing the authors hypotheses estimating returns for the shareholders after the merger. Conclusions are made on the shareholder wealth effects.

 

KEYWORDS: f, merger, norwich, union, cgu, shareholder, wealth, effects,

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