Long-term performance of Canadian acquiring firms

Abstract

This study investigates the long-term stock return and operating performances of Canadian acquiring firms in the post event period by using 1300 M&A events between 1993-2002 period. We use both event-time and calendar-time approach to detect long-term abnormal stock return. Consistent with market efficiency hypothesis, we do not find any strong support for long-term abnormal return following an acquisition event. We also do not find any improvement in long-term operating performance once we use matching firm approach.