Short-term And Long-term Effects Of Mergers And Acquisitions

This article analyzed the short term and long term mergers and acquisitions performances of 131 public companies from 2009 till 2011. The result demonstrated that stock price could enjoy significantly short term increase before the announcement of M&A decision, however only little gains would remain after the news announcement. This phenomena is most significant in related industry M&A cases. In terms of long term effects, M&A companies showed significant improve on their financial performance after 2 year of their M&A. The research also found investors could earn positive abnormal return if they hold the M&A stocks for 2 years after the announcement day. In a nutshell, this article proved that M&A have positive effects on companies in both short-term and long-term.