The impact of mergers and acquisitions on maximizing the company's market value : econometric study for the period (1985-2018)‎

Abstract EN

This paper examines the impact of mergers and acquisitions on maximizing the company's market value.

The study concluded that there was a mutual causality running in one direction; from mergers and acquisitions to the market value of the traded shares used in the study to measure the company's market value.

The study also showed that there was a high correlation between the two variables of the study yielding a correlation coefficient of 65%.

Furthermore, the dynamic VAR analysis revealed that the response of the market value of shares to M&A shocks had positive effects over the response period.

As far as the variance decomposition results are concerned, they showed that M&A had a positive effect of more than 67% on the market value of shares, especially in the medium term.