Required to design and carry out an event study that analyses the impact that the announcement of mergers and acquisitions (M&A) has on the share prices of acquirer and target companies.

Paper details:

In this assessment, you are required to design and carry out an event study that analyses the impact that the announcement of mergers and acquisitions (M&A) has on the share prices of acquirer and target companies. You will find the relevant M&A data using Thomson Banker, as instructed during the lecture.

Your aim is to analyse the impact of an M&A announcement on acquiring and target firms separately, thus allowing you to compare the impact of M&A announcements on acquiring vs target firms. The announcement dates should be restricted to 1st January 2014 to 31st
December 2014.

You will need to read a synopsis of previous literature examining share price reaction around M&A to fully understand how to set up your hypotheses and methods of enquiry and should discuss the literature briefly in your report. Links to relevant papers will be put on Blackboard. The marking grid for the empirical research is attached.

You need to find announcement data for 50 acquiring firms, and for 50 target firms (100 in total). It should select target and acquiring firms from the same country i.e. UK.

You will need to conduct two separate searches for the M&A data on Thomson, one for acquiring firms, and the second for target firms. You then need to gather the share price data for your observations, along with the closing prices for an appropriate stock index, i.e. for the UK it can be the FTSE all-share index, or for the USA the S&P 500 index.