Stock Market Reaction of Bidding firms to Merger and Acquisition Announcements in the Shipping Industry
School of Economics, Business Administration and Legal Studies, MSc in Banking and Finance
Mergers and acquisitions have proved to be the most effective strategies towards the
completion and achievement of the organizational objectives of shipping firms. The
importance of this corporate event is evidenced by the increasing number of
transactions that took place in recent years.
The purpose of this dissertation is to investigate the stock market reaction of listed
bidding shipping firms to the announcement of a merger or an acquisition. The
transactions of mergers do not only create value on the merging enterprises, but also
generate a positive or negative wealth effect for the shareholders of bidding firms.
Employing the classical event study methodology of the dataset consists of 172
mergers and acquisitions that occurred between 2000 and 2014. Empirical results
revealed positive abnormal and cumulative abnormal returns for the acquiring firms
on the announcement day and period, respectively.