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A Study on The Impacts of Mergers and Acquisitions on Operating Performance and Stock Price of Involved Firms

Khatib, Noushin | 2015

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 53172 (44)
  4. University: Sharif University of Technology
  5. Department: Management and Economics
  6. Advisor(s): Bahramgiri, Mohsen
  7. Abstract:
  8. Mergers and acquisitions are one of the easiest and sometimes the only way to stay in the market for small or low performing companies. In this research, which consists of two main parts, the impact of merger and acquisition on the stock price and financial statements of the involved companies that were listed in Iran stock exchange market was studied between 2007 and 2012.The first step, through an event study, abnormal stock returns of the targeted companies were studied in time spans of five and ten days before and after the merger and acquisition event. Then a t test was applied in order to examine whether this transaction had resulted in positive abnormal return for the shareholders or not.Second approach, which was an analysis of the financial statements, was focused on three financial ratios including return on assets (ROA), return on equity (ROE) and return on sales (ROS) one and two years before and after the mergers and acquisitions. These ratios were compared to their industry standards with two different methods and finally with a t test existence of a significant change in the ratios before and after the event was checked.Results of the research reveal that in Iranian stock market buyers do not react positively to mergers and acquisitions. Also, with regard to financial ratios, as time passes, the results of the transaction would become more notable. In conclusion, in Iran market mergers and acquisitions, as a strategic measure, would potentially improve the status of the involved corporations, if there was an appropriate attitude toward different aspect of such this critical decision
  9. Keywords:
  10. Performance ; Stock Price ; Acquisition ; Coalescence ; Tehran Stock Exchange ; Stock Market

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