Investigation of value creation through merger : evidence from Amman Stock Exchange

Other Title(s)

التحقق من خلق القيمة للشركات المدرجة في بورصة عمان للأسهم من خلال الإندماج

Dissertant

Boulanouar, Assia Yahya Bin Isa

Thesis advisor

al-Ali, Asad Hamid Ubayd

University

Mutah University

Faculty

Faculty of Business

University Country

Jordan

Degree

Master

Degree Date

2011

English Abstract

This study aimed to investigate the value creation for corporations listed in Amman Stock Exchange (ASE) through merger from 1990 to 2010.

In order to reach the study purpose, the researcher conducted two different methods: first, an event study is carried out over five cases of merger based on short term analysis (abnormal return "AR" and cumulative abnormal return "CAR") using a daily return for an event window with [+30, -30] and long term analysis (buy and hold abnormal return "BHAR") using monthly return for three different post merger' event widow [0, +12], [0, +24] and [0, +36].

Second, an analysis of financial indicators is conducted over six cases of merger based on one, two, and three years before and after merger for the target and the merging firms. The AR, CAR and BHAR are tested using the parametric one sample t-test for their significance of difference from zero, the results showed a significant statistical difference.

Also, a parametric t-test and a nonparametric Wilcox on sign rank test for the difference between AR, CAR and financial indicators is run.

The results for both tests are consistent for the CAR with significant statistical difference pre and post merger; the financial indicators record insignificant statistical difference using both tests.

However, a contradict for the AR is obtained between both tests where a significant difference is reached using parametric t-test and insignificant one using nonparametric Wilcox on sign rank test.

Finally, the study demonstrated that a value is created for the short run ; however it is disappeared for the long run. In light of research results, the researcher recommends to take in consideration others measures to estimate value creation such as the way of financing a merger.

Furthermore, it suggests conducting study about the most successful sector in merger and the factors affecting that success in Jordan.

Main Subjects

Business Administration

Topics

• Financing
• Jordan
• Economic aspects

No. of Pages

112

Table of Contents

• APA
• MLA
• AMA

Language

English

Data Type

Arab Theses

Record ID

BIM-301949