An analysis of wealth change of acquiring-firm shareholders in the recent technology mergers wave in U.S.

Abstract

This paper examines the experience of acquiring-firm shareholders wealth during recent technology merger wave in U.S. from 2010 to 2014. The methodology in this paper uses 635 acquisitions from the high-tech industry over the period 2010 to 2014. The mean cumulative abnormal return and aggregate dollar return are used to measure the yearly wealth change of acquirer shareholders. The paper finds that large loss and gain deals lead to different results of acquiring-firm shareholders wealth change in the same year. In addition, the paper examines the impact of relative firm and deal characteristics on the results. The findings show that these characteristics contribute limitedly to abnormal returns associated with large loss and gain deals.