商业与金融事务杂志

Abnormal Returns to Shareholders of M&A Participating Firms: Evidence from the Kuwaiti Stock Market

Abstract

Mohammed Tarabay* and Jamil Hammoud

Mergers and Acquisitions (M&A) continue to occur in the world of business, albeit in waves similar to cycles. As such, M&A have remained a research interest for academics as well as practitioners. While there is convergence among researchers toward finding positive abnormal returns accrued to target firm shareholders, returns to shareholders of acquiring firms remain a question of debate and conflicting evidence. This study attempts to examine the wealth effects of acquisitions in the Kuwaiti economy for the shareholders of both, acquiring and target firms, during the period of 2004-2009. The event study methodology is used to examine whether there were positive or negative returns accruing to the shareholders of the participating firms around the announcement of the acquisition in the cases of 43 acquiring firms and 30 target firms.