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Shareholder Wealth Effects of Mergers and Acquisitions in the Telecommunications Industry

In: Telecommunication Markets

Author

Listed:
  • Olaf Rieck

    (DoanNanyang Technological University)

  • Canh Thang Doan

    (DoanNanyang Technological University)

Abstract

In the past 10 years, Telecoms operators frequently engaged in M&As with the objectives to grow bigger and achieve higher earnings. However, the question arises whether and under what conditions they have really been able to achieve these objectives. The aim of this research is to investigate M&As in the telecoms industry and analyze the conditions under which such M&As can be considered successful. In doing so, we employ the event study method, which traces immediate market reactions to M&A announcements and the corresponding shareholder value effects. We first apply the event study method to our full set of M&As to obtain a broad picture of the shareholder value effects of M&As in the telecoms industry. We then proceed by investigating specifically (1) whether the shareholder value effects depend on the degree to which M&As are driven by a service diversification strategy; and (2) whether the shareholder value effects depend on the M&As being driven by an international diversification strategy.

Suggested Citation

  • Olaf Rieck & Canh Thang Doan, 2009. "Shareholder Wealth Effects of Mergers and Acquisitions in the Telecommunications Industry," Contributions to Economics, in: Peter Curwen & Justus Haucap & Brigitte Preissl (ed.), Telecommunication Markets, pages 363-394, Springer.
    • Handle: RePEc:spr:conchp:978-3-7908-2082-9_21
    DOI: 10.1007/978-3-7908-2082-9_21
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    Citations

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    Cited by:

    1. Navío-Marco, Julio & Solórzano-García, Marta & Matilla-García, Mariano & Urueña, Alberto, 2016. "Language as a key factor of long-term value creation in mergers and acquisitions in the telecommunications sector," Telecommunications Policy, Elsevier, vol. 40(10), pages 1052-1063.
    2. Lee, Hyeongjik & Seol, Seong-ho & Kweon, Soo Cheon, 2012. "An event study of the first telecommunications spectrum auction in Korea and "the winner's curse"," 23rd European Regional ITS Conference, Vienna 2012 60394, International Telecommunications Society (ITS).
    3. Navio-Marco, J & Solorzano-Garcia, M & Urueña, A., 2015. "Language As Key Factor Of Long-Term Value Creation In Mergers And Acquisitions In The Telecommunications Sector," 26th European Regional ITS Conference, Madrid 2015 127170, International Telecommunications Society (ITS).
    4. Navío-Marco, Julio & Serrano Calle, Silvia & Solórzano-García, Marta, 2017. "Analysis of glamorous acquisitions in the telecommunications sector: Overvaluation or success?," 28th European Regional ITS Conference, Passau 2017 169487, International Telecommunications Society (ITS).

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