7Implication of mergers and acquisitions on stock returns before and during the 2007–2009 credit crunch: An event study

  • G Amewu
Keywords: economic crisis, non-economic crisis, M&As, event study, stock returns


Considering the 2007–2009 financial situation, one cannot help but wonder how the crisis affected the wealth associated with merger and acquisition (M&A) announcements. This article examines the impact of such announcements on the stock returns (performance) of public companies during financial and non-financial crisis periods. Specifically, the article seeks to compare the effects these announcements have on the stock returns of bidder firms during a crisis period and a non-crisis period. The financial crisis period considered announcements made between October 2007 and February 2009, while that of the nonfinancial crisis was between January 1999 and October 2007. Data were collected from Reuters Business Database, Bloomberg Database, Thomson Datastream and other webbased sources. With the use of event study methodology, the study reveals that there are no significant modifications in the stock return of a bidder firm’s shares, either during or before a global economic crisis.

Keywords: economic crisis; non-economic crisis; M&As; event study; stock returns


Journal Identifiers

print ISSN: 2042-1478