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Valuing The Impact Of Synergies On Public Mergers/Acqusitions In The Pharmaceutical Sector On The European Capital Markets

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  • Oana Resceanu

    (Academy of Economic Studies FABBV Bucharest, Romania)

Abstract

Valuing and identifying synergies in mergers and acquisitions is one of the important issues in Corporate Finance. The aim of this paper is to value the impact of synergies resulted from mergers/acquisitions in the European pharmaceutical sector, realized between 2004 and 2007. In the study it has been analyzed the impact of the announcement of the deal on the stock price evolution of the acquiring companies for which it was used the event study technique. The results show clearly the positive market expectations in the day of the announcement as well as 6 days after, however the expected positive impact begins to fade out resulting in negative expectations in days 23 and 38, while regaining its confidence in day 39.

Suggested Citation

  • Oana Resceanu, 2010. "Valuing The Impact Of Synergies On Public Mergers/Acqusitions In The Pharmaceutical Sector On The European Capital Markets," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 3(38), pages 507-513, May.
    • Handle: RePEc:aio:aucsse:v:1:y:2009:i:11:p:507-513
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    File URL: http://feaa.ucv.ro/AUCSSE/0038v3-061.pdf
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    References listed on IDEAS

    as
    1. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-329, May.
    2. Gregor Andrade & Mark Mitchell & Erik Stafford, 2001. "New Evidence and Perspectives on Mergers," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 103-120, Spring.
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    More about this item

    Keywords

    mergers; acquisitions; synergies; valuation; public offers;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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