Date of Award


Document Type

Open Access

Degree Name

Bachelor of Arts


Managerial Economics

First Advisor

Kaywana Raeburn




Mergers and acquisitions remain the primary corporate growth strategy for executives around the world. While deals continue to rise in popularity, their success in generating value for participating firms remain uncertain. A vast majority of merger and acquisition research focuses on this disparity and considers whether they create or destroy value for stakeholders. In this thesis, I examine the value generated to shareholders by US acquisitions and mergers announced between 2005 and 2009. Utilizing the event study methodology, I evaluate cumulative abnormal returns (CAR) for acquiring firms to analyze the wealth effects of merger and acquisition announcements. CAR is a direct measure of the change in shareholder wealth resulting from an event because CAR represent the difference between the return conditional on the event and the expected return. I find that acquiring firm shareholders realized average cumulative abnormal returns of - 1.572% during a five-day event window centered around the event announcement, and -3.905% during a two-month event window. Furthermore, when distinguishing the characteristics of deals that impact the returns to shareholders, transaction value has a statistically significant negative correlation with CAR. The results of this thesis support previous literature findings that the returns to shareholders of the acquiring firms are often not significant and sometimes negative.

Included in

Econometrics Commons