EU Mergers' Impact on Operating Performance - An Event Study of Merger-Related Operating Performance Changes in the EU after the IFRS Enforcement

Sammanfattning: By examining a sample of 52 cross-industry corporate mergers completed between 2008-2011, this study investigates mergers' impact on operating performance in the EU, as well as potential determinants for post-merger performance. The results provide some evidence that mergers improve operating performance of merging firms. They also imply that the main driver of these improvements is rather better cost and/or pricing management than asset utilization. Additionally, we find strong evidence that mergers fully paid by stock perform worse than transactions paid with cash or a mix of cash and stock, and weaker evidence that mergers where the acquirer and target are from the same country, and where the acquirer is heavily leveraged, perform better than their respective opposites. Regarding determinants acquisition size and industry-relatedness, no results prove robust enough to determine any significant influence on performance change.