Analysis of post-merger integration of automobile firms

Abstract

This paper’s objective is to determine whether merger announcements of world automobile companies would influence the stock price of acquired companies and whether the market reaction to merger announcement is good or bad. 24 acquired companies from the OTC market and 10 acquired companies come from the NYSE market are randomly chosen for this study. The time period is chosen from 1998 to 2012.The DJ (USA) index is used as market return in this paper. The Market Return Model, the Average Abnormal Return Model and the Capital Asset Pricing Model (CAPM) will be used in this paper. In summary, this study is going to prove whether the merged world automobile firms would gain or loss after merger announcement.